Medicaid is a government program that was designed to take care of the poor. Regardless of how you feel about that, that is its intended purpose. Despite its best of intentions, we all know that it is a system riddled with fraud and abuse. But, a shocking new report was just released, and can you guess what is responsible for billions of dollars in Medicaid waste? It’s not Welfare Moms “gaming the system,” it’s Obamacare!
According to a new study published by the National Bureau of Economic Research (NBER), instead of those at the poverty level, Medicaid is being used to provide medical insurance for an unprecedented number of “middle-class Americans.” The cost to taxpayers? Hundreds of millions of dollars.
The culprit for this epic amount of government is none other than Obamacare. The 2010 healthcare law dramatically expanded Medicaid, by making everyone with income below 138% of the federal poverty level eligible. This expansion was supposed to be mandatory starting in 2014. To help states with the cost, the federal government covered 100% of the costs of expansion from 2014 through 2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% in 2020 and thereafter.
However, a 2012 Supreme Court decision made it optional; 37 states plus the District of Columbia opted to follow Obamacare’s dictates. Voters in Idaho, Maine, Nebraska, and Utah have approved Medicaid expansion via ballot initiative, the rest have opted out.
A Fundamental Shift in Medicaid’s Purpose
Obamacare created a fundamental shift in Medicaid’s purpose. According to Forbes, “Medicaid was established to serve the genuinely needy: low-income Americans, seniors, the disabled, and poor children. Obamacare flooded the program with able-bodied, working-age adults—that is, people who could likely secure private insurance on their own.” By the end of 2016, some 11.5 million able-bodied adults had enrolled in Medicaid because of the expansion, more than double the original enrollment projections.
But according to the NBER study, while numbers like that are certainly costing the program, and therefore taxpayers more, that is not really the problem. The real issue is waste. Many of the newly enrolled should actually be ineligible because they make more than 138% of the federal poverty line. The new NBER study, co-authored by professors at the University of Kentucky and Georgia State University, calculates that more than half a million ineligible people have enrolled in Medicaid across the expansion states examined.
Some states have struggled particularly hard with eligibility issues. Consider Kentucky, which clocked in some of the biggest insurance coverage gains in the country after accepting the Medicaid expansion. In 2014, nearly four in ten Kentuckians who enrolled—about 73,000 people—weren’t actually eligible for Medicaid. And in April, the state Department of Health revealed that more than 1,600 of the new Medicaid enrollees were making at least $100,000 a year!
This rise in enrollment among ostensibly ineligible people is one illustration of how Medicaid expansion “crowds out” private insurance. People who already have coverage in the private market switch over to the public dole.
This “crowding out” hurts taxpayers. Hundreds of thousands of people who have no business claiming taxpayer-funded health coverage are doing just that – and you and I are paying for it!