What You Need to Know about Medicaid Reform
The House Budget Does NOT “Cut” Medicaid
- CBO estimates that Medicaid spending will grow by $2,019,000,000,000 over the next ten years
- Even if ALL of the $880 billion in Energy and Commerce Committee savings come from Medicaid, the program will still grow by $1.14 trillion in the coming decade
- Using the “cut” phrasing implies government has a right to grow in perpetuity
Medicaid Spending Estimates Have Exploded
- $817 billion increase in ten-year CBO baseline from June 2024 to January 2025—12 percent increase in projected spending in only six months
- In May 2019, CBO projected 2025 enrollment at 77 million—now estimated at 84 million this year (roughly 10% higher than pre-COVID estimates)
- Biden Administration regulations at center of most of the $817 billion increase—repealing those actions could yield significant savings
Federal Matching Funds Create Distorted Incentives
- States receive a much higher federal match to cover able-bodied adults (90%) than individuals with disabilities (50-77%)
- Over 700,000 vulnerable patients on waiting lists for care
- Provider tax “scam” and other funding gimmicks are designed solely to bilk Washington out of additional money
- Some states do not pay a single dollar in general fund revenue to finance their Medicaid expansion—no incentive to limit enrollment, or to fight fraud
Serious Problems with Eligibility Determinations
- Expansion exacerbated problem of crowd out—individuals dropping private coverage to go on the government rolls
- Wall Street Journal analysis revealed individuals enrolled in multiple states, because no one has an incentive to take program integrity seriously
- High improper payment rate estimates due to eligibility errors
- Most people deemed “presumptively eligible” aren’t eligible or never apply for coverage (or both)
- Immigration problems plague Medicaid—need for stricter verification standards, Hillary Clinton quote about welfare state proving a magnet for migrants