The facts about Medicaid – do nothing?

Republicans are taking a lot of heat over efforts to control Medicaid spending. Here are some facts to consider. At the state level this spending draws funds from other services. This is a problem ignored for years. Obamacare expanded the program to assure more Americans had coverage, but ignored the cost factors and future growth in spending. This is open-ended spending with no caps or controls.

Reading the press and social media it’s hard to find anyone who agrees with cuts to Medicaid, apparently not even establishing a form of budget that increases annually, but at general CPI rates. Democrats are playing the class, emotion and income cards once again, but nobody seems to try to balance Social needs with fiscal reality. 

You may not agree with the Republican approach, but what action should we take, if any? Or, are we fine with what we spend now and in the future and how we spend it?

74,600,261 individuals were enrolled in Medicaid and CHIP in the 51 states reporting March 2017 data. 68,965,776 individuals were enrolled in Medicaid and 5,634,485 individuals were enrolled in CHIP (please see contextual information below regarding CHIP enrollment). Nearly 16.8 million additional individuals were enrolled in Medicaid and CHIP in March 2017 as compared to the period prior to the start of the first Marketplace open enrollment period (July – Sept. 2013), in the 49 states that reported relevant data for both periods, representing almost 30 percent increase over the baseline period. Source: CMS data


Growth in the Medicaid program, like most other entitlement programs in the U.S., has caused the program to reach a point of unsustainability. Since 2013, enrollment in Medicaid has increased 25 percent. Total program expenditures increased 11 percent in 2014 and federal expenditures increased an estimated 16 percent in 2015. States spend more than a fourth of their annual budget on Medicaid, crowding out funding for other essential services.

Any efforts to reform Medicaid and restore fiscal sustainability to the program must include plans to eliminate improper payments in the program. Medicaid has been on the Government Accountability Office’s (GAO) list of high-risk programs since 2003 because of its high improper payment rate, consistently ranking second among federal programs with the highest improper payment rates. Since 2008, Medicaid’s improper payment rate has averaged 8.4 percent, resulting in $161 billion worth of improper payments and accounting for more than 17 percent of all improper payments made by the federal government. Eliminating all of the waste, fraud, and abuse in just Medicaid (assuming a continued improper payment rate of the current 9.8 percent) would reduce the deficit by approximately 11.4 percent, according to the Congressional Budget Office’s most recent projections.

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