Health

FGA Report Shows States Are Spending More on Ineligible Medicaid Enrollees Than They’re Receiving From Federal Funding Bump

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“States are fiscally worse off thanks to the strings attached to the increased federal funding. Surrendering control of program management has cost taxpayers billions of dollars and diverted resources away from those who are actually eligible,” said Trevor Carlsen, a Senior Research Fellow at FGA.


NAPLES, Fla. (PRWEB)

A recent Foundation for Government Accountability (FGA) report shows that conditions included in exchange for increased federal Medicaid funding have led to unsustainable Medicaid enrollment growth that is now costing states more than they are receiving from the increased funding. By agreeing to not strengthen program eligibility standards, adjust the enrollment processes, or remove individuals from their Medicaid rolls even when they become ineligible for the program, states are spending more than they are receiving from the federal funding increase.

Now, states are spending nearly $655 million per month on their Medicaid programs with net costs for the 32 of the states that accepted increased funding expected to increase to $1.4 billion per month by April 2022. These “lock-in” enrollees are costing states millions, with Texas losing $169.2 million per month on 1.3 million ineligible enrollees, New York losing $140 million per month on 1.2 million ineligible enrollees, and Idaho losing $20.1 million per month on 245,949 ineligible enrollees.

Proposals by President Biden and Congressional Democrats would make Medicaid losses even worse by extending these conditions that cover ineligible enrollees while phasing out the enhanced federal contributions.

“States are fiscally worse off thanks to the strings attached to the increased federal funding. Surrendering control of program management has cost taxpayers billions of dollars and diverted resources away from those who are actually eligible. It is time for states to regain control over their Medicaid programs,” said Trevor Carlsen, a Senior Research Fellow at FGA. “States need to unlock the federal handcuffs to restore Medicaid program integrity.”

Conditions could worsen in the coming months as federally provided pandemic assistance ends. States should not wait for Congressional action to take control of their Medicaid programs—they should begin to remove ineligible enrollees to protect these resources for the truly needy.

The Foundation for Government Accountability (FGA) is a non-profit, multi-state think tank that promotes public policy solutions to create opportunities for every American to experience the American Dream. To learn more, visit TheFGA.org.

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