The share of recipients who aren’t eligible has grown sharply since the expansion began in 2014
Improper spending in the Medicaid program more than tripled in 2019, according to an analysis by scholars Brian Blase and Aaron Yelowitz, pointing to misuse of the program since it was dramatically expanded under Obamacare.
The Centers for Medicare and Medicaid Services released a report Monday showing “high levels of observed eligibility errors,” based upon audits it has conducted.
Blase (of the Galen Institute) and Yelowitz (Cato) analyzed the CMS report and found 20% or more of Medicaid spending in 2019—an amount likely to exceed $75 billion—is improper (compared to 6% before the Obamacare Medicaid expansion).
ObamaCare expanded the program designed for the poor and vulnerable to working-age adults with incomes up to 138% of the poverty line or about $17,000 for a single person. States receive a much higher reimbursement rate for enrolling them than they do for signing up traditional Medicaid recipients.
As a result of the elevated reimbursement, states have a major incentive to classify people as expansion enrollees.
States view the Medicaid expansion as a cash cow and have generally failed to conduct proper eligibility reviews. One federal audit by the Health and Human Services Department’s inspector general found that more than half of sampled enrollees in California’s Medicaid program were either improperly enrolled or potentially improperly enrolled.
Blase and Yelowitz estimate that 2.3 to 3.3 million people with incomes above the Medicaid eligibility thresholds are improperly enrolled.