Brian Blase, Ph.D., is the President of Paragon Health Institute. Brian was Special Assistant to the President for Economic Policy at the White House’s National Economic Council (NEC) from 2017-2019, where he coordinated the development and execution of numerous health policies and advised the President, NEC director, and senior officials. After leaving the White House, Brian founded Blase Policy Strategies and served as its CEO.
Reform Medicaid’s Flawed Funding Formula
Medicaid is broken, and Republicans in Washington and in state capitals have an opportunity to fix it. President Trump has pledged to protect the program, in part by cutting waste, fraud and abuse. The House budget target would reduce the growth of federal Medicaid payments over the next decade from $2 trillion to $1.2 trillion. That is a good start. Medicaid wastes enormous amounts of taxpayer money as states use it to reward politically powerful healthcare providers.
Republicans in Congress must tackle a funding formula that disadvantages Medicaid’s most vulnerable patients and encourages states to game the program. Designed as a safety net for low-income children, pregnant women, seniors and the disabled, Medicaid has become a political piggy bank. Many states no longer bother with serious budgeting because it is so easy to receive federal Medicaid money.
Much of the trouble dates to 2014, when ObamaCare expanded Medicaid to able-bodied working-age adults. Historically, Washington paid about 60% of the bill for Medicaid, with states paying the rest. Today, Washington pays more than 70% of Medicaid’s costs. One reason is that those brought into the program through expansion receive 90% federal funding. That led Medicaid’s improper payment rate to quadruple.
Related Content
Subscribe
Sign up now for your health policy updates.