January 5, 2023
State spotlight: Fighting to Unlock Congress’ Medicaid Handcuffs
No good deed goes unpunished. That unfortunate maxim has proven true for states that accepted the federal government’s increased Medicaid funding at the height of the COVID-19 pandemic.
During that uncertain time, many states were grappling with how to provide help and resources for their neediest residents. But, as the Foundation for Government Accountability (FGA) has exposed with their wide-ranging and all-encompassing research, the states that accepted the Federal government’s help in the form of increased Medicaid funding are now suffering the consequences of the expensive and illogical strings that were attached to that help.
In the spring of 2020, the country was struggling with increasing COVID cases, uncertainty about people’s jobs, livelihoods and lives in general, and anxiety about how long the pandemic (and the effects of the pandemic) would last.
In response to all this, Congress passed the Families First Coronavirus Response Act (FFCRA) which offered states an additional 6.2 percent increase in funding for their Medicaid programs. Not knowing how many people would need to join the Medicaid rolls and the impact that would have on their budgets, many states accepted the increased funding. However, there were onerous and expensive strings attached to the increased funding.
The FFCRA made it so that any state that accepted the increased funding would be forced to relinquish control over significant aspects of their Medicaid programs. If a state accepted the FFCRA funding, they would not be allowed to change their Medicaid eligibility standards, adjust enrollment processes, or remove individuals from their Medicaid rolls—even if the Medicaid enrollees had become ineligible or were never eligible in the first place.
So, in one of the most unsurprising outcomes ever, Medicaid enrollment skyrocketed when Congress put handcuffs on states accepting aid as the global pandemic unfolded. In 2000, nationwide Medicaid enrollment was around 34 million. By February 2020, Medicaid enrollment had shot up to 74 million. In January 2023, nearly two years after the Medicaid handcuffs were put on states, Medicaid enrollment spiked to almost 99 million enrollees and is estimated to potentially reach 100 million by March 2023.
To track the nationwide impact of these historic enrollment numbers, FGA created a state-by-state data dashboard and recently launched a Countdown Clock to raise awareness about this grim and looming milestone.
In light of this ballooning Medicaid enrollment—and ballooning mismanagement and fraud—the FGA has produced multiple research reports and conducted targeted outreach to reform-minded state leaders to 1.) inform them of the dangerous costs these Medicaid handcuffs are inflicting on their state’s taxpayers and most vulnerable residents, and 2.) show them how to enact the needed reforms to combat this costly policy.
Medicaid has quickly become one of the biggest line-item costs for state budgets. Current estimates for Medicaid’s total cost for states is more than $700 billion per year. But even more shocking than the extreme cost of Medicaid for states is how that money is being spent. Today, more than one in five dollars spent on Medicaid is improper. These improper costs come from eligibility errors, administrative oversights, or outright fraud. Eligibility errors make up 80 percent of these improper payments which means that countless people ineligible to receive Medicaid benefits are receiving them anyway. This siphons desperately needed resources away from the truly needy.
By producing the in-depth and wide-ranging reports such as “Ineligible Medicaid Enrollees are costing taxpayers billions” and “Stopping the Medicaid Madness: How Congress and states can start salvaging some program integrity” and conducting a multi-media approach to highlight their one-of-a-kind research, the FGA was able to reach state leaders desperate for solutions to this Medicaid boondoggle and more importantly, offer solutions.
The FGA targeted high value media outlets such as the Wall Street Journal, New York Post, and Fox Business with exclusive research in order to secure earned media mentions and editorials. The FGA also ran targeted social and email campaigns in select states to reach decision makers who could enact the needed reforms.
Because of FGA’s groundbreaking, quality research, and their well-planned marketing campaign, they were able to engage with state leaders in more than a dozen states. They have worked with elected officials in Pennsylvania to introduce a reform bill. And FGA is also working with state leaders in Wisconsin and Missouri on similar reform bills.
In public policy and politics, it often feels like no good deed goes unpunished, but as the FGA has shown, with the right data and research, and effective messaging and marketing, necessary reforms can be implemented to save taxpayers and the vulnerable from policies enacted in the name of “helping” during a pandemic.
