While Covid-era legislation helped get us where we are, it was ObamaCare’s expansion of Medicaid to able-bodied adults that kicked things off. Though the Affordable Care Act prohibited those with an offer of “affordable” employer coverage from qualifying for federally subsidized ObamaCare exchange plans, it had no such restrictions regarding its Medicaid expansion. Any enrollee in an expansion state who meets the law’s income criteria qualifies for coverage, giving households every incentive to drop their existing insurance and enroll in “free” Medicaid.

As a result, expanded Medicaid has crowded out private insurance options. A 2007 study co-authored by Jonathan Gruber, one of the law’s architects, found that coverage expansions had crowd-out rates of roughly 60%. A 2008 analysis by the Kaiser Family Foundation found that, even among households of modest means with incomes between one and two times the poverty level, 44% had private coverage, suggesting that Medicaid expansion would erode existing sources of insurance.

Nearly six years ago, I wrote in these pages how one state’s Medicaid expansion caused thousands of people to drop their private plans. Data from the Louisiana Department of Health showed that between 3,000 and 5,000 people a month dropped their private coverage during the initial months of the state’s Medicaid expansion. The numbers suggested that roughly a third of Medicaid enrollees had left their private coverage to join the government rolls.

With the federal government financing 90% of the cost of the Medicaid expansion to able-bodied adults—and many states using funding gimmicks to finance their 10% share—states likewise have minimal incentives to stem the flight of individuals from private coverage to Medicaid. For instance, Louisiana had a premium assistance program to subsidize private coverage when its Medicaid expansion took effect, but spent only $11,730 promoting this option from 2017 to 2019. During that time total enrollment never exceeded 1,000—a small fraction of those dropping private insurance every single month. Montana has even promoted crowding out, claiming that “decreasing the number of employees relying on employer-sponsored insurance . . . can reduce the financial burden on employers.”

Republicans in Congress can stop this unending welfare state bloat in the reconciliation process by mandating that states offer premium assistance and requiring qualifying Medicaid beneficiaries to use it. Rather than paying for everything Medicaid entails, premium assistance supplements employer coverage by helping a person pay for costs their private insurance doesn’t. If Congress did this, use of private insurance would expand.

Those beneficiaries who switch to premium assistance would gain more options. Private insurance generally offers higher physician reimbursements and broader access to care than Medicaid plans. Such a mandate would complement work requirements in Medicaid, by promoting a path to self-sufficiency and employer-based coverage rather than a life of dependency on the government. And requiring premium assistance would accomplish both objectives in ways that save taxpayers money.

The Biden administration used its regulatory muscle to expand government coverage. This Congress and this administration should be just as aggressive in promoting access to high-quality private coverage. Premium assistance in Medicaid is one important path to achieving that objective.

This post was originally published at The Wall Street Journal.