Who’s Afraid of Medicaid Reform?

States have turned the program for the poor into an entitlement for able-bodied men

WSJ editorial. Excerpts:

"Medicaid spending is out-pacing even Social Security and Medicare. Federal Medicaid outlays have increased 207% since 2008 and 51% since 2019. Medicaid spending as a share of federal outlays rose to 10% from 7% between 2007 and 2023, while the share of Social Security and Medicare remained stable."

"Medicaid outlays are on track to increase by $2.4 trillion through 2035 under the Congressional Budget Office baseline projections. So shaving $880 billion from that baseline would still amount to a $1.5 trillion increase in Medicaid spending."

"To hit the $880 billion target, Republicans would merely need to slow Medicaid spending growth to about 2% annually. Mind you, this follows the Biden blowout when federal Medicaid spending has grown about 9% a year. One reason is Democratic-run states have figured out how to scam Medicaid to finance their other spending priorities.

One trick is imposing taxes on hospitals and managed care insurance plans, which states then use to spend more on Medicaid to collect more federal dollars. For every dollar states spend on Medicaid, the feds chip in one to three. The match is nine-to-one for the ObamaCare expansion population, which gives states an incentive to spend more on the healthy able-bodied than on the vulnerable."

"New York received $3,046 for each state resident in 2023 based on the most recent federal data. Federal Medicaid dollars also subsidize California ($2,167 per resident) and Illinois ($1,715) much more than Florida ($991) and Texas ($1,239)."

"The Biden Administration also gave states waivers to spend federal Medicaid dollars on non-medical purposes, including food, homeless housing, and personal transportation for beneficiaries. Health and Human Services is only supposed to grant such waivers if they don’t increase the federal deficit, but the Biden HHS ignored this rule."

"Mr. Biden’s HHS even blessed California’s plan to spend federal Medicaid dollars on “activity stipends” for art and music lessons for children and club sports. Oregon is tapping Medicaid to pay for cooking classes, air conditioners and mini-refrigerators."

"most people with Medicaid know it provides lousy care. Cancer patients lack access to top hospitals and wait months to see specialists owing to the program’s low reimbursement rates."