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The Truth About Medicaid Redeterminations 

Good news, America: The Medicaid handcuffs are coming off soon!

Remember how Congress offered states a bump in Medicaid funding on the condition that they couldn’t remove ineligible enrollees unless they died or moved out of state? 

Well, under a new law, states are able to conduct what are known as “redeterminations” right now and begin removing ineligible individuals on April 1, 2023. 

Like clockwork, big-government advocates are doing their part to spread misconceptions to deter states from expediting their redetermination processes. Let’s set the record straight: 

CLAIM: Medicaid redeterminations will strip Americans of a welfare program they’ve come to depend on—it’s cutting a program people need.

REALITY: Restarting redeterminations and removing ineligible enrollees is a return to normal, not a new provision or cut to the program.  

Redetermining program eligibility is a return to normal. Eligibility was determined annually prior to the pandemic—reinstating regular eligibility checks is simply putting a pre-pandemic program integrity measure back in place. The removal of the handcuffs means that states will now be able to verify if enrollees are eligible—and if they aren’t, remove them from the program—meaning more resources for the truly needy. 

Nationwide, the Medicaid enrollment total is rapidly approaching 100 million—and a staggering 22 million of those individuals are ineligible. The cost of these ineligible enrollees is significantly more than the small funding bump promised by the federal government. 

Even before the pandemic and the handcuffs caused a shocking influx of Medicaid enrollees, state programs were in shambles. States that expanded Medicaid to able-bodied adults were already seeing massive enrollment overruns (nearly 160 percent higher than projected) and staggering budget shortfalls (with per-person costs 64 percent above estimates). The Medicaid handcuffs made the situation even worse because suddenly, many more people were being enrolled, millions of them ineligible. 

The consequences of this massive influx of ineligible enrollees are three-fold: There are fewer resources for the truly needy. Taxpayers are on the hook for $16 billion per month for ineligible enrollees. And state budgets are being increasingly crowded out by high Medicaid expenditures.

CLAIM: Removing people from Medicaid will leave them without options for health care coverage. 

REALITY: Those who no longer qualify for Medicaid have numerous options for health care coverage. 

For adults that are ineligible and are removed, there are options—and better options for coverage, at that. In states that have not expanded Medicaid to able-bodied adults, many people can qualify for federally subsidized silver plans on the exchange for as low as $0 per month. Others can pursue employer-sponsored coverage.

CLAIM: This “unlocking” of the handcuffs will leave children without health coverage. 

REALITY: Medicaid redeterminations only have to do with Medicaid, not CHIP. 

Children will continue to have access to health care. The Children’s Health Insurance Program (CHIP)–Medicaid for kids, essentially—is not affected by the restart of redetermination. The unlocking of the handcuffs only affects the Medicaid program for adults. Even if a child’s parents become ineligible for Medicaid, the eligibility of children for CHIP will not change. 

Redeterminations are a great step toward post-pandemic recovery 

Most Americans have moved on from the pandemic, and even President Biden said, “the pandemic is over.” Policy should reflect that. Medicaid redeterminations are a great first step to ensuring welfare benefits are directed to the truly needy and making better, more prudent use of tax dollars, and states should approach this process with the sense of urgency it requires.

At FGA, we don’t just talk about changing policy—we make it happen.

By partnering with FGA through a gift, you can create more policy change that returns America to a country where entrepreneurship thrives, personal responsibility is rewarded, and paychecks replace welfare checks.