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How States Are Protecting Their Medicaid Programs

100 million Americans are on Medicaid—an inauspicious (and expensive) milestone the country reached earlier this year.

With that in mind, it’s worth shining a spotlight on several examples of under-the-radar successes that are making a big difference for taxpayers in four states: Arizona, Arkansas, Idaho, and Virginia. 

At the heart of the problem is this: Of those 100 million on Medicaid who were on Medicaid earlier this year, more than 20 million are ineligible—yet many are still receiving Medicaid benefits anyway. That’s a massive failure on the part of the government, especially for a program that operates as a federal-state partnership requiring trust and accountability.

For the past three years, the federal side of that partnership has been handcuffing their state partners, with the COVID health emergency specifically prohibiting states from redetermining the eligibility of those enrolled in Medicaid. The bureaucratic language of a “continuous enrollment provision” allowed anyone who was eligible for Medicaid at one time to continue receiving benefits even if their eligibility changed—even if they took a new job or got a big raise. In effect, states were handcuffed from making changes for any reason short of the recipient dying or moving out of state. 

Those handcuffs were unlocked in May 2023, and states have begun the process of unwinding their Medicaid programs. 

Here’s how four states are leading the way:

In Arizona, protecting the taxpayer is a bipartisan effort. Democratic Governor Katie Hobbs signed a law to remove individuals known to be ineligible from Medicaid by the end of this year—even defying federal guidance to advocate for their state. 

In Idaho, the state is leaning into its reputation as a national success story of hard work and small government, initiating the unwinding process with a formal letter to ineligible recipients. Idaho’s process is expected to run through September, and even those who are found to be ineligible are given a grace period to find and enroll in the coverage for which they are eligible.

In Arkansas, Gov. Sarah Huckabee Sanders is setting one of the most aggressive timelines of any state—aiming to finish redeterminations by June 30, well ahead of the Biden administration’s year-long runway. Some other states won’t even begin looking by then.

In Virginia, the return to normal eligibility checks began immediately, with a 12-month runway for the 2.1 million Virginians who are currently on Medicaid or the state’s Family Access to Medical Insurance Security (FAMIS) Plan. Virginia enrollment in Medicaid spiked by nearly 50 percent since the start of the pandemic, and the state estimates that 18 percent of existing enrollees (394,000 people) are receiving benefits for which they may no longer be eligible. 

This is the bottom line: The cost of covering ineligible enrollees is one the American taxpayers shouldn’t have to pay. And while there’s never a “good” time for unchecked, unaccountable government spending, this is a particularly bad time—for two reasons. 

First, because the economy itself is still struggling with uncertainty. Our country just emerged from a debt-ceiling fight that threatened to default the entire American economy; inflation is still taking a bite out of workers’ paychecks; and main-street businesses in every community are desperate to find good workers. Work, not fraud, should be rewarded.

Second, because the taxpayers are on the hook for plenty already. An Associated Press analysis this month of the “great grift” detailed more than $400 billion in theft and waste in COVID relief spending. That’s more than $1,200 for every man, woman, and child in America—more than enough to completely undo the $1,200 economic stimulus checks sent out by the government in March 2020. Taxpayers deserve better.

Other states are on their own timeline for completing Medicaid redeterminations, but with this much taxpayer money at stake, states should be commended for bringing accountability back to Medicaid. 

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