Debunking the Myths of the One Big Beautiful Bill
Myth: The OBBB will harm the most vulnerable Medicaid enrollees.
Key Facts
- The OBBB will improve access to care for the most vulnerable Medicaid enrollees—low-income children, pregnant women, the elderly, and people with disabilities—by refocusing the program on them.
- Since 2013, Medicaid rolls have swelled under the Affordable Care Act. More than 20 million able-bodied, working-age adults to Medicaid. These new enrollees, who now account for about 25 percent of Medicaid enrollees nationwide, have put additional strain on the health care system and diverted resources away from vulnerable Medicaid enrollees
- Excessive federal reimbursements for Medicaid expansion enrollees and lax federal rules have fueled rampant enrollment fraud. A recent Paragon analysis estimated that about 6.6 million enrollees classified in the expansion group likely earn too much to qualify for coverage. Yet, prior to the OBBB, states had virtually no incentive to combat ineligible enrollment, making it more difficult for traditional enrollees to obtain care.
- The OBBB implements long-overdue reforms to restore program integrity to Medicaid and ensure that care is delivered to traditional Medicaid enrollees. The OBBB puts in place:
- More frequent eligibility checks and community-engagement requirements for able-bodied adults covered through the ACA expansion.
- Cost-sharing requirements for able-bodied adults covered under the ACA expansion to protect taxpayers from wasteful health care spending.
- Enhanced penalties for states with high Medicaid improper payment rates, specifically for errors stemming from ineligible enrollment.
- Restrictions on illegal immigrants accessing Medicaid benefits.
Background
Ensuring access to timely, high-quality care for patients on Medicaid has been a long-standing challenge. Prior to the ACA, studies showed that Medicaid patients had inferior access to care and worse health outcomes than comparable individuals with private coverage. Yet instead of heeding these warning signs and taking steps to improve the program for the most vulnerable Americans, the federal government has recklessly expanded enrollment to new able-bodied adult populations. Predictably, as new enrollees compete for a limited pool of providers, access to care for traditional Medicaid enrollees has eroded.
Numerous academic studies have found evidence that enrolling able-bodied adults undermined access to care for vulnerable enrollees. A 2022 study from the Mercatus Center found that per-capita Medicaid spending on children grew much more slowly in Medicaid expansion states than in non-expansion states from 2013 to 2019, implying that needy children likely faced greater barriers to care. A meta-analysis found that prior to the ACA, Medicaid patients were only half as likely to obtain a doctor’s appointment as the privately insured. Post-ACA, Medicaid patients’ chances declined to less than one-third relative to the privately insured. A 2021 analysis of emergency department data reported that Medicaid expansion caused a 10 percent increase in the amount of time spent waiting to be seen, as well as a 15 percent increase in the proportion of patients who left without seeing a provider.
