New FGA Research Highlights Medicaid Funding Flaws in COVID-19 Legislation

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Naples, FL — Two new research papers from the Foundation for Government Accountability (FGA) reveal how provisions in the pair of COVID-19 relief packages could do long-term financial damage to the Medicaid program and hinder the country’s eventual economic recovery.

Taken together, the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) block states from maintaining routine program eligibility standards and threaten to permanently add millions of Americans to government insurance without a sunset period.

In order to receive increased Medicaid funding, states cannot remove even ineligible enrollees unless those enrollees request a voluntary termination. States frequently report more than 30 percent of cases reviewed at redetermination are cancelled, and as the economy gets back on track and Americans return to work, states should be able to rightly end the Medicaid benefits of those no longer needing assistance. These routine integrity guidelines, however, are done away with as part of the FFCRA.

Further provisions in the CARES Act could incentivize welfare over work long after the pandemic has ended and our economy is on the road to recovery. These incentives are supposed to sunset with the end of the crisis, however past experience shows this policy could extend well beyond that date.
“In times of crisis, we need to make sure our safety net is strong and available for those Americans staring down a scary, uncertain future,” said Sam Adolphsen, policy director at FGA. “Good intentions must not lead to bad policy, and unfortunately the devil is in the details. This legislation codifies inane conditions that will make it more difficult for states to secure additional Medicaid funding, while creating long-term financial instability in the program and in state budgets—which are already feeling the strain created by the COVID-19 crisis and years of out-of-control government growth.”

Read the two new research papers here:

Extra COVID-19 Medicaid Funds Come at a High Cost to States

How the CARES Act Moves America Towards Medicaid For All

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The Foundation for Government Accountability is a non-profit, multi-state think tank that specializes in health care, welfare, and work reform. To learn more, visit TheFGA.org.