Understanding the Medicaid Program

Medicaid is a vital health care program in the United States, jointly funded by federal and state governments. It provides health coverage to approximately 79 million low-income individuals, which constitutes nearly 25% of the U.S. population as of November 2024. With projected total spending on Medicaid reaching around $833.5 billion in 2024, it plays a critical role in ensuring access to health care for many.

The Call for Reform

Discussions surrounding Medicaid often center on fears that any reforms may jeopardize the program’s integrity. However, advocates for genuine improvement argue that these concerns primarily protect the status quo rather than addressing necessary changes. A variety of reforms have been identified as instrumental to enhancing the program’s efficiency, fairness, and accountability.

Proposed Medicaid Reforms

1. Strengthening Eligibility Verification

During the COVID-19 pandemic, Medicaid enrollment surged from 70 million to 94 million. This leap was partly due to policies that restricted states from verifying eligibility. As states gradually resume eligibility checks, Congress should also consider reversing policies that incentivize inflated enrollment figures over the strict enforcement of eligibility criteria.

2. Adjusting Enrollment Priorities

Medicaid’s expansion under the Affordable Care Act (ACA) introduced a new eligibility category for able-bodied, childless adults, leading to a disproportionate emphasis on enrolling this demographic over other traditional groups. To restore equity, Congress should align the federal match rate for this group with standard rates applicable to other beneficiaries.

3. Ending Financial Manipulations

Some states utilize strategies, such as taxing Medicaid providers to secure federal funds, which ultimately return those taxes through increased reimbursements. Congress needs to curb such practices by tightening regulations and closing loopholes that exploit these financing mechanisms.

4. Implementing Work Requirements

Similar to other welfare systems, introducing work requirements for able-bodied enrollees could promote self-sufficiency. Although some progress was made during the Trump Administration in approving state proposals for such requirements, the Biden Administration rescinded these agreements. Future reforms should seek to reinstate and enhance these policies.

5. Comprehensive Program Evaluation

Given that Medicaid has evolved significantly over its 60-year history, a thorough re-evaluation of its purpose, structure, and efficiency is imperative. Projections indicate that by 2032, enrollment may rise to 85 million individuals, with spending expected to hit $1.3 trillion. A systematic review could identify valuable policy adjustments to ensure sustainability and predictability.

A Call to Action for Congress

The current climate presents a unique opportunity for Congress to address the pressing challenges faced by Medicaid. Engaging in thoughtful and commonsense reforms will not only benefit enrollees but will also relieve taxpayers and enhance the program’s sustainability for future generations. It is crucial that lawmakers take proactive measures now to initiate these necessary changes.