Want Medicaid to Last? Enforce Higher Standards
In a previous post, I pointed out how dishonest it was for many politicians and media outlets to treat the Congressional Budget Office’s Medicaid projections in the One Big Beautiful Bill Act as unquestionable fact—confidently claiming that millions of people would lose their health coverage (and subsequently die). Setting that dishonesty aside, the reality is that Medicaid, in its current form, is unsustainable. In FY2023, Medicaid expenditures reached $894 billion, with the federal government covering $614 billion, which was about 69% of the total. Medicaid now consumes nearly 10% of the federal budget.
To further underscore the situation, Medicaid is now the single largest source of health coverage in the United States, providing care for nearly 80 million people. That fact should concern us for two reasons: first, that so many Americans must rely on Medicaid in the wealthiest country in the world, and second, that we are failing to secure the program’s long-term survival by merely kicking the can down the road toward an inevitable fiscal crisis. Although Medicaid is administered by the states, it is funded jointly by both state governments and the federal government, and because the federal government covers the majority of the cost, Medicaid has become a national issue—one that must be addressed by Congress and the President. It is an enormously expensive program that millions depend on, and if it is to survive, we must impose stricter standards on how its funds are allocated and managed.
A recent report from the Centers for Medicare & Medicaid Services (CMS) illustrates how mismanagement within Medicaid undermines its purpose. The report identified 2.8 million Americans who were either enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) in multiple states, or simultaneously enrolled in both Medicaid/CHIP and a subsidized Affordable Care Act (ACA) Exchange plan. CMS estimates that this duplication is costing taxpayers up to $14 billion annually. Contributing to the problem, the Biden Administration barred states from checking Medicaid eligibility more than once a year even though many individuals use the program only as a temporary safety net. That’s a dereliction of duty. The One Big Beautiful Bill Act proposes requiring states to check twice a year whether able-bodied adults enrolled under the Medicaid expansion are still eligible. This simple measure could help prevent wasteful and reckless spending.
When individuals are enrolled in Medicaid across multiple states, it leads to unnecessary and duplicative disbursements. As noted earlier, while Medicaid is federally funded, it is administered at the state level, which creates gaps in oversight that allow this kind of abuse to occur. The federal government must take a more active role in ensuring that enrollment data is accurate and up to date. The One Big Beautiful Bill Act addresses this by requiring states to use reliable, existing data sources to verify where beneficiaries actually reside. It’s a simple, sensible step to prevent fraud and preserve resources for those who truly need them. Oh, and by the way, the 2.8 million duplicate enrollees offer more evidence that the CBO may be overstating how many Americans would actually lose access to subsidized coverage under these proposed reforms.
Since 1966, Medicaid has spent more than $13 trillion with little compelling evidence to show it is achieving its intended outcomes effectively. It remains an enormously expensive program, poorly managed, and plagued by the kind of fraud, waste, and abuse that too often characterizes federal spending. However, Medicaid is a vital source of health coverage for millions of Americans, and eliminating it outright would be both disastrous and inhumane. If it is truly going to serve as a lasting safety net for the poor, Medicaid must undergo serious reform—reform that ensures every dollar is spent accurately, efficiently, and with clear accountability.
