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Federal Medicaid Handcuffs Harm States and the Truly Needy

At the beginning of the pandemic, Congress passed the Families First Coronavirus Response Act (FFCRA), which included a 6.2 percent temporary increase in Medicaid funding. If states accepted the extra funding, they had to relinquish control over their Medicaid programs to the federal government. All 50 states took the deal, handcuffing their ability to remove ineligible enrollees from their Medicaid programs.

When ineligible participants flood Medicaid rolls, there are fewer resources available for the truly needy—yet states cannot remove the ineligible as long as they accept the additional federal funding.

The overreach has led to record-high enrollment, improper payments, and a shrinking workforce. Recently, Foundation for Government Accountability Deputy Research Director Hayden Dublois joined The Daily Signal Podcast to discuss the finer points of this federal overreach and what states can do to regain control. 

During the interview, Hayden explained how Medicaid was originally designed for the truly needy. However, program enrollment has reached a record high at 89 million participants—an increase of 16 million since the beginning of the pandemic. In the interview, they discussed the recent spike in Medicaid enrollment, consisting mainly of able-bodied adults. Since 2000, more than 27 million able-bodied adults have been added to the Medicaid rolls. 

Hayden broke these numbers down explaining how Medicaid enrollment broadened with ObamaCare legislation and FFCRA’s restricting states from removing participants who are no longer eligible—roughly 90 percent of new Medicaid enrollees during the pandemic are no longer eligible. 

More highlights from Hayden’s interview with The Daily Signal Podcast:

“The problem is a huge portion of these new enrollees aren’t on because of the pandemic, they’re on because of … government mismanagement.”

“It’s been distorted into a program that has veered from its original mission of serving the most vulnerable.”

“A lot of states have passed that tipping point where it’s actually cost ineffective for them to continue receiving that money.”

“We’re going to start seeing more and more of a scrambling to find ways to continue to pay for ineligible enrollees on Medicaid. And it’s going to come out of one pocket, which is higher taxes, or the other pocket, which is a crowding out of other spending priorities.”

Listen to the full interview here.

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