Medicaid is hemorrhaging $100B on Americans ineligible for the program
By Brian Blase
New York Post, November 28, 2020
States are facing alarming costs for their shares of Medicaid spending, and a new report helps explain why: the government—both in Washington and in state capitols across the country—is failing to ensure that only those who are eligible for benefits are enrolling.
The federal government’s improper Medicaid payments now exceed $100 billion a year. This means that more than one-in-four dollars flowing out of Medicaid — our nation’s third-largest government program — do not meet program rules. This staggering failure doesn’t just reduce health-care access for the truly eligible, it also harms taxpayers who fund it.
Medicaid is meant to cover health care and long-term care for lower-income Americans. But ObamaCare ushered in Medicaid expansion to non-disabled, childless, working-age adults, and the Obama administration also canceled the audits on eligibility in the first four years of the expansion. Their focus was to maximize enrollment, even if it was unlawful.
The Centers for Medicare and Medicaid Services (CMS) examined states each year from 2017-2019 for its 2020 report—which was entirely pre-coronavirus. It showed an improper payment rate of 21.4%— a total of $86.5 billion. (The actual amount is much higher because eligibility audits were not conducted in the year 2017. If you only count the two years where an eligibility audit was performed, the improper payment rate is actually 27 percent — and improper federal spending totals more than $100 billion.)
The CMS report says the main problem is that states are not verifying people’s eligibility. In fact, “the required verification of eligibility data, such as income, was not done at all” in many cases, and it also suggests many people remain on Medicaid well past the time they were initially eligible.
Before the year ends, the Trump administration can take one important and overdue step to address Medicaid’s improper payments, which have soared with ObamaCare’s expansion. CMS should finalize a fiscal accountability rule that would enhance Medicaid program integrity. This rule would require states to report to CMS where the $600 billion of Medicaid expenditures—including the $400 billion of federal tax dollars—is going. It also limits accounting gimmicks that some states use to rip off federal taxpayers.
While much more work needs to be done to reform Medicaid, including ensuring only eligible people are enrolled, greater transparency would be a good first step toward limiting widespread waste, fraud, abuse, and misspending.