Ballooning Medicaid enrollments crowd out care for truly vulnerable populations such as pregnant women, poor children, and the disabled. Meanwhile, young, healthy, working-age adults are opting out of the workforce, knowing they can still get healthcare coverage.
Policymakers should rightsize Medicaid, reserving the safety net for those who truly need it. How much do you know about the development of Medicaid? Let’s play “Two Truths and a Lie” and find out!
A. Medicaid only serves the vulnerable in our society, such as poor children and pregnant women, disabled adults, and some elderly Americans.
B. Lax oversight by the federal government of states’ enrollment of Medicaid recipients and providers contributes to tens of billions of dollars in fraudulent payments annually.
C. Seven states plus DC provide Medicaid coverage to adults regardless of immigration status.
A. LIE! While around 36.8 million people were living in poverty in the United States as of 2023, more than double that number were enrolled in Medicaid. Currently, more than 25% of working-age, able-bodied adults on Medicaid do not have children or jobs. Medicaid became available to these individuals through the Affordable Care Act (ACA), which expanded Medicaid coverage. While both state governments and the federal government fund Medicaid, the ACA increased the amount of funding the federal government matched for able-bodied, childless adults who were not working by 90%.
Additionally, the Biden administration understandably permitted unemployed individuals without the ability to work because of pandemic restrictions to participate in Medicaid during the COVID pandemic. However, those temporary expansions were unwisely made permanent. Now, due to substantial federal funding directed at work-capable, childless individuals, states are incentivized to prioritize enrollment of toward able-bodied people.
B. TRUTH! Overpayments, inaccurate recordkeeping, fraud, and other issues contributed to $50.3 billion in fraudulent Medicaid payments in 2023. According to the U.S. Government Accountability Office (GAO), improper payments amounted to an estimated $2.7 trillion over the past 20 fiscal years. After the ACA, improper payments increased from 6% to over 25%. Due to the Obama and Biden administrations’ lack of records of Medicaid eligibility checks, the magnitude of Medicaid fraud remains untold.
C. TRUTH! Despite the law prohibiting those in the U.S. illegally or legally on a temporary basis from participating in full-scale Medicaid, seven states allow low-income adults to access state Medicaid funds regardless of their immigration status. In total, 14 states, in addition to the District of Columbia, offer Medicaid benefits to children without restricting their eligibility based on their immigration status.
Medicaid’s lack of eligibility standards and verification of beneficiaries has resulted in exorbitant funding to non-citizen participants. Consequently, the Biden administration spent over $16 billion from 2017 to 2023 to cover illegal immigrants.
Bottom Line:
Since its inception, Medicaid coverage has been expanded to include categories of people it was not originally designed to serve, resulting in a system that prioritizes able-bodied, non-working adults over pregnant women, the disabled, and poor children. Furthermore, fraudulent spending and a lack of verification have resulted in significant payment errors. Through reforms, such as mandatory audits and state work requirements, Medicaid can be restored to accomplish its original purpose.
To learn more, read the Policy Focus: Rightsizing Medicaid for Those Who Need It Most