Republicans in Congress are eyeing cuts to Medicaid, the entitlement that provides health coverage to roughly 1 in 5 people. Requiring beneficiaries to work, volunteer, or attend school as a condition of receiving coverage and block-granting federal Medicaid funds to the states are under consideration.
But with complete control of Congress and the White House, Republicans should think bigger and repeal Obamacare’s fiscally irresponsible expansion of Medicaid to able-bodied people.
Congress originally created Medicaid to provide healthcare for disabled and vulnerable people. But the Affordable Care Act allowed states to offer Medicaid coverage to able-bodied people earning up to 138% of the federal poverty line. Forty states and the District of Columbia have signed on and added 21 million people to the program, bringing the number of enrollees across Medicaid and the related Children’s Health Insurance Program to 79.6 million.
Since then, Medicaid spending has spiraled out of control. The entitlement cost $880 billion last year. Its outlays are projected to exceed $1 trillion before the decade ends.
Republicans have a slate of ideas for reining in that spending — an imperative, given that the federal budget deficit in 2024 was roughly $2 trillion, according to the Congressional Budget Office. By 2034, the deficit is projected to reach $2.8 trillion. That’s nearly 7% of gross domestic product.
Adding work requirements to Medicaid would help arrest the growth of the program and ideally get people on the path to a job and private coverage. Work requirements would save the government $109 billion over 10 years, according to the CBO.
Shifting the program’s financing formula to block grants from the current open-ended federal match, whereby the federal government picks up 50% to 83% of the cost of coverage for legacy enrollees, and 90% for expansion enrollees, would also help.
States should not have a financial incentive to expand Medicaid enrollment, especially among able-bodied people, who should be able to secure coverage on their own, given the country’s dire fiscal state.
A 2017 study from Avalere estimated that block-granting Medicaid could result in $150 billion less in federal spending over five years.
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Rolling back Obamacare’s expansion of the program would, of course, deliver additional savings for taxpayers. A June 2024 CBO report pegged the cost of providing coverage to able-bodied adults at $1.4 trillion between 2025 and 2034.
The Medicaid status quo is unsustainable. Republicans should seize their chance next year to prevent the program from further drowning the federal budget in red ink.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on X, formerly Twitter, @sallypipes.
This article was originally published at www.washingtonexaminer.com
