The United States had the rug pulled out from under our way of life, as, overnight, our lives and our economy completely changed. With tens of millions unemployed and most of the country staying home, the nation looked to Congress for help. Unfortunately, the relief we first felt with the passage of the Families First Coronavirus Response Act, or the FFCRA, and the CARES Act soon gave way to disappointment when we realized just what these big-government bills mean for workers, businesses, and states.
At a time when state budgets are already beginning to collapse, the FFCRA handcuffs states from removing ineligible people from their Medicaid programs. No wonder there are already talks of bailouts: Congress’s confusing and likely illegal language in the act put states between a rock and a hard place. It forces states to choose between accepting additional Medicaid funds and violating federal statutes and their own state program integrity laws or adhering to federal statutes and state laws but not getting a penny of the emergency aid.
These changes in the act mean that, as millions of new, able-bodied applicants move onto Medicaid, states that agree to accept the additional funding will be unable to remove anyone, even when they return to work or become ineligible. Even worse, our legal experts have found that states may not be reimbursed for the ineligible applicants they were forced to accept because of legal uncertainty surrounding the funding.
As if this Medicaid mess wasn’t bad enough, in their fervor to pass anything to help struggling citizens, Congress succeeded in making it more advantageous for many to be on unemployment benefits than to work. It is so lucrative to stay on unemployment that, when an excited employer was able to secure a government loan and rehire her employees, she was met with outrage over what would now be a pay cut. Her small business had no choice but to close, as it was financially better for her employees to be unemployed.
A surprise to most, even some members of Congress, is a hidden provision of the CARES Act that does not treat the additional $600 per week that unemployed individuals are receiving as “income” for the purposes of determining Medicaid eligibility. Unemployment is typically counted for Medicaid eligibility, but not in this case. This means that someone who enrolled in Medicaid while unemployed and then gets a new job, even if they’re now making six figures, remains enrolled in “free” government-provided healthcare.
Remember: The language in FFCRA prevents states from being able to remove them.
Even the late President Franklin Delano Roosevelt, not one to shy away from government intervention, spoke of the dangers of using safety net programs for long-term relief. In his 1935 State of the Union address, he said, “Continued dependence upon relief induces a spiritual disintegration fundamentally destructive to the national fiber. To dole our relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.”
We talk about the American dream but then too often design welfare programs that trap people in a nightmare of poverty, dependency, and despair.
Congress should immediately act by removing the provision from the CARES Act so that, going forward, the additional $600 per week that individuals are collecting above and beyond their unemployment income is treated as income for determining Medicaid eligibility — what we’ve always done, and the same as we do for other welfare benefits.
Congress must also ensure that states have the tools to manage their Medicaid programs and preserve resources for the most vulnerable. They should eliminate the requirement from FFCRA that states must keep even ineligible individuals on Medicaid and ignore their state program integrity laws. This is a terrible provision that couldn’t come at a worse time for states trying to manage their budgets.
Some would call this a Medicaid “perfect storm.” At a time when some are pushing for “Medicare for all,” this seems like an attempt to push Medicaid for millions. It is the most recent attempt at welfare for all, and it should be stopped.
Now that these issues have been brought to the surface, it is time for Congress to act swiftly to deal with them. The consequences of inaction are far too great.
Robin Walker is the senior director of federal affairs at the Foundation for Government Accountability.
