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Medicaid’s Broken Math: $9 for the Able-Bodied, $1.33 for the Truly Needy

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Brian Blase
President at Paragon Health Institute

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.

When states spend $1 of state funds on traditional enrollees, they receive $1.33 of federal funds.

When states spend $1 of state funds on able-bodied, working-age adults, they receive $9 of federal funds.

Thus, states get nearly seven times more federal funding for a $1 of spending on able-bodied, working-age adults than children, pregnant women, seniors, and the disabled.

Giving states seven times the incentive to spend on able-bodied adults, states are prioritizing the healthy at the expense of the more vulnerable. Research shows that traditional Medicaid recipients are most harmed in terms of less ability getting doctors appointments and in terms of people with disabilities being on wait lists.

Giving states such bad incentives is the main reason why the federal government made $1.1 trillion in improper federal Medicaid payments over the past decade.

8.1MS New FMAP 7 PIC 01

When states spend $1 of state funds on traditional enrollees, they receive $1.33 of federal funds.

When states spend $1 of state funds on able-bodied, working-age adults, they receive $9 of federal funds.

Thus, states get nearly seven times more federal funding for a $1 of spending on able-bodied, working-age adults than children, pregnant women, seniors, and the disabled.

Giving states seven times the incentive to spend on able-bodied adults, states are prioritizing the healthy at the expense of the more vulnerable. Research shows that traditional Medicaid recipients are most harmed in terms of less ability getting doctors appointments and in terms of people with disabilities being on wait lists.

Giving states such bad incentives is the main reason why the federal government made $1.1 trillion in improper federal Medicaid payments over the past decade.

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Brian Blase
President at Paragon Health Institute

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.