Utah can avoid Obamacare’s rampant Medicaid fraud
Expanding Medicaid — free or nearly free healthcare for the needy — was an integral part of Obamacare. But five years later, the expansion’s rampant fraud and abuse are making states like Utah that delayed jumping on the bandwagon look prescient and prudent.
Obamacare’s 2014 Medicaid expansion added millions of beneficiaries nationwide whose incomes were as high as 250 percent of the federal poverty level. Requirements vary by state, and a Supreme Court decision made state participation optional.
Most states dominated by Democrats jumped in immediately; a number of more conservative states joined the parade in following years. With federal taxpayers picking up 90 percent of the cost, many argued that failing to join was tantamount to “leaving free money on the table.” As of March 2018, 32 states had opted to expand Medicaid.
But far more people enrolled in expanded Medicaid than were forecast, devouring state government budgets. This even after the Oregon Health Insurance Experiment showed that expansion “had no statistically significant effect on several measures of physical health.”
States have been forced to cutback spending for education, roads, and other services. Even in conservative Utah, social services including Medicaid will be 2020’s largest state budget component, eclipsing public education.
These states have discovered that there’s no free lunch and no free money when it comes with federal government strings. Obamacare put the federal government in charge of Medicaid eligibility and required services. Would you be surprised if I told you that both steadily expanded while funding didn’t?
Making matters far worse, a National Bureau of Economic Research study published last month reported that a stunning 78 percent of newly-enrolled households had improperly enrolled in Medicaid. When the State of Oregon audited its Medicaid rolls, it found that nearly half of recipients were no longer qualified.
These facts cast a dark shadow of doubt over claims that Medicaid expansion would serve only those in need.
Bureaucratic ineptness coupled with Obamacare’s sloppy legislation (Speaker Nancy Pelosi said “We have to pass the bill so that you can find out what is in it”) in effect have transformed Medicaid expansion from serving the needy into a middle-class entitlement program.
Expanded Medicaid supporters argue that this rampant abuse is to be expected in any new major program. But the NBER report documents that abuse in 2017 was two to three times more prevalent than it was in 2014. Word spreads fast when free federal money is being doled out indiscriminately.
Utah’s Proposition 3, passed by 53 percent of voters in 2018, would have expanded Medicaid to about 150,000 additional recipients, frozen co-pays permanently, and — perhaps most ominously — forced the state to conform to any future federal changes.
Medicaid expansion was controversial in Utah with opponents arguing that Medicaid is intended to help only the neediest in obtaining healthcare. The proposition’s expansion would add many who were physically able to work and otherwise eligible for subsidized Obamacare healthcare policies.
Utah’s legislature voided the proposition and passed its own more limited Medicaid expansion. Its version will cover about 80,000 residents; comes with a work, volunteer, or education requirement; and — most importantly for its long-term viability — is not beholden to future federal requirements changes.
Usually ignored in media reporting, Utah has an opportunity to avoid the rampant Medicaid abuse that has taken place in other states. A careful enrollment process would be a good start. Regular follow-up eligibility audits would identify those who should “graduate” to employer-provided health insurance or to subsidized Obamacare policies.
No matter how well intended, offering free stuff invites overuse and sadly leads to fraud and abuse. I applaud Utah’s careful and thoughtful approach to caring for those most in need. Let’s hope that all 80,000 beneficiaries are eligible.
The viewpoints expressed above are those of the author and do not necessarily reflect those of The Independent.
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Howard- you are correct x 50. ALL States can avoid the rampant fraud, but choose not to because it would reduce further Federal funding. Perverse, but true. Michigan would have to return between 64% and 90% of monies recovered from fraud in the Medicaid program to the Federal Treasury. This is noted in a report of the Michigan House Fiscal Agency http://www.house.mi.gov/hfa/PDF/HealthandHumanServices/Michigan_Medicaid_Program_Oct2015.pdf
that stated on page 3: “Additionally, for each $1.00 in State savings from reductions in the State Medicaid Program, the State foregoes nearly $2.00 in Federal funds.” That’s the issue. I should know, I founded the company behind HR 6690, Fighting Fraud and Protecting Seniors Care Act of 2018. Passed the US House, AMA and AHIP paid to have it killed in the Senate.