Coming to a theater near you: "Medicaid Melodrama."
“House Republicans just voted to rip health care away from up to 1.8 million New Yorkers — all to bankroll giveaways for billionaires," wailed New York Gov. Kathy Hochul on March 5.
"Yes, but what about the little, tiny babies, Sen. Patty Murray of Washington?" I wrote earlier this month. “Moms and babies will lose health care coverage," she stated flatly on the Senate floor.
In 2010, Barack Obama and the Democrats voted to expand Medicaid coverage from the very poor to the middle class. A program designed to help those who couldn't afford insurance, assisting states in covering them, became a program literally for almost anyone funded by Washington.
The results were predictable. The federal government was paying states 80-90% of the additional Medicaid costs to accept the enrollees who could afford their insurance.
Now, Republicans want to bring sanity back to Medicaid and stop paying healthcare costs for those who can afford private insurance purchased through the Affordable Care Act portal.
Just trimming the waste from Medicaid could save the government hundreds of billions of dollars. The Wall Street Journal published an investigation of Medicaid waste and found that hundreds of thousands of patients cost the government billions of dollars in extra payments to insurers because they had signed up and were receiving benefits in two states at once.
This is entirely preventable and could be fixed if there were a clearinghouse for states to check Medicaid payments to insurers.
It's unknown how much this practice of patients being covered in two states is costing Washington. But we know that Presidents Biden and Obama were both lax in enforcing even minimal checks on the system.
According to official reports, the government issued $543 billion in improper Medicaid payments from 2015 to 2024. But that’s only what the government measured.
Based on the few years that the government performed full audits, I coauthored a report with Paragon Health Institute President Brian Blase that estimated that the true amount of improper payments is twice that, totaling roughly $1.1 trillion over the last decade. That’s a whopping $8,200 per U.S. household.
The primary reason for the discrepancy is that the Obama and Biden administrations excluded eligibility checks in their audits of improper payments in Medicaid. But eligibility errors and failures to properly assess eligibility prior to enrollment are the biggest sources of improper payments.
In addition to the lax eligibility checks leading to thousands of recipients being enrolled in a program for which they are not eligible, insurance companies, which were supposed to check for patients applying for benefits in two states, failed in their due diligence.
Medicaid guidelines require that if a recipient moves to another state, they're supposed to cancel their coverage in their former state when signing up in the new one. This usually gives them a different insurer. But if they don't cancel their old coverage, it's up to the state to catch the error.
"The Journal’s analysis turned up some cases in which individuals were signed up in five or more states," the article states.
“Paying for a beneficiary’s Medicaid coverage in one state when that individual is already enrolled in a different state is a prime example of taxpayer dollars being mismanaged,” said a federal Medicare and Medicaid agency spokeswoman.
Ya think?
“It’s a heavily regulated industry,” said Craig Kennedy, chief executive of Medicaid Health Plans of America, an industry group. “Following rules and regulations is the No. 1 priority here.”
The Medicare and Medicaid agency doesn’t screen for the double payments, leaving that to the states. State officials said identifying people who moved is difficult, and that recoveries of improper payments from managed-care companies are limited. Because state agencies often don’t realize Medicaid recipients have moved until their annual eligibility checks, managed-care companies can collect months of payments before a patient is dropped from the rolls.
“We may be paying premiums on behalf of an individual who might have moved, and we don’t know that they have moved,” said Caprice Knapp, an industry consultant and former director of North Dakota’s Medicaid agency. “It definitely is wasteful.”
Medicaid expansion was ill-advised, and Republicans were universally opposed for reasons such as these.
If states want to cover these additional recipients who will lose their coverage when Medicaid goes back to where it was in 2010, no one will stop them. But this ever-expanding black hole of welfare payments to individuals who may or may not meet a needs test for coverage has to stop.
