The Medicaid welfare rolls have grown significantly.
Throughout and even after the COVID-19 pandemic, the federal government paid states to keep millions of ineligible individuals on the Medicaid rolls. The Biden Administration then implemented the “Maintaining Enrollment in Medicaid Rule” to restrict states from cleaning up their rolls and verifying eligibility.
By FY 2023, 98.2 million Americans were enrolled in Medicaid. That is a 33% increase above the pre-pandemic FY 2019 level.
More than twice as many individuals were on Medicaid welfare in FY 2023 than were reliant on the program during the 2008 Great Recession.
Source: MACPAC
Growing Medicaid Welfare Dependency
In FY 2023, 29% of the population was on the Medicaid welfare rolls. This was a significant increase above the historical normal. In FY 1999, only 11.4% of the population was on Medicaid.
Greater reliance on federal welfare is not a victory – it is a failure by the government that harms taxpayers and enrollees alike.
Medicaid Is a Failed Program in Need of Reform
Medicaid is rife with waste, fraud, and abuse. The worst part is that Medicaid delivers poor outcomes for the most vulnerable in our society while hundreds of billions of dollars per year flow to hospitals, insurance companies, and state bureaucracies.
Studies have shown that Medicaid consistently provides worse health results and less access to care than private coverage. For example, the landmark Oregon Medicaid Experiment found that Medicaid coverage did not improve physical health outcomes.
The Obamacare Medicaid expansion has diverted resources away from vulnerable children, the elderly, and Americans with disabilities in order to increase benefits for able-bodied, work capable adults.
Medicaid has also been a failure for the taxpayers. The open-ended financing structure leads to waste, fraud, and abuse. Over the last decade, Medicaid made $567 billion in improper payments. These improper payments “equal $4,300 per U.S. household and are enough to provide private health insurance coverage to more than 2.2 million families.” States even use loopholes and gimmicks to launder federal money through the Medicaid program.
State governments are flush with cash, after the federal government spent hundreds of billions of taxpayer funds in recent years subsidizing state and local bureaucratic jobs. State rainy day funds are nearly twice their pre-pandemic balances, and nearly every state saw their general fund revenue collections come in above or on target in FY 2024.
It is clear that Medicaid is a welfare program in need of significant reform. The budget reconciliation process should be an opportunity to make common sense reforms that increase efficiency and improve care for beneficiaries of the Medicaid welfare program.
