On Aug. 31, the Biden administration’s Centers for Medicare and Medicaid Services released a 300-page proposed rule aimed at expanding Obamacare’s fast-track Medicaid enrollment policies, fostering even greater dependency on government. Specifically, the proposed rule would expedite Medicaid enrollment and limit eligibility reviews, making it easier for ineligible people to continue receiving benefits. This rule will mean more people on public programs, greater costs, and fewer safeguards in place to protect the program from waste, fraud, and abuse. This express lane rule should be stopped in its tracks.
Democrats’ main health policy aim is to increase enrollment in Medicaid and federal, rather than state, control of the program. Massively expanding Medicaid appears to be their chosen path to a universal healthcare system.
Medicaid is now our largest public welfare program, enrolling 82 million people. Obamacare significantly expanded the Medicaid program to able-bodied, working-age adults. Federal COVID-19 policies increased dependency on Medicaid by blocking states from removing ineligible people from the program. As a result, Medicaid enrollment is up nearly 30% since early 2020, and the program is accommodating nearly 20 million people who are not eligible for it.
Moreover, Medicaid, which delivers disappointing outcomes, now costs federal and state taxpayers about $800 billion annually. CMS estimated that its proposal would increase Medicaid enrollment by nearly 3 million people per year and taxpayer costs by an additional $100 billion from 2023 to 2027.
Rather than give states more flexibility to better manage the program, address the surge of improper enrollment, and preserve the program for only those who are eligible, the Biden administration’s proposed rule would do the opposite. It would force states to enroll applicants without basic verification, leading to increased enrollment and more misspending.
Historically, many states checked eligibility at least every six months. But Obamacare limited states’ ability to conduct eligibility reviews for children and nondisabled adults to just once every 12 months.
Frequent eligibility reviews are important to ensure that the program is reserved for those who need it. Medicaid eligibility is affected by income fluctuations and changes in state of residence, household size, and other such life changes that do not happen on a yearly calendar. This misguided rule would prohibit more frequent eligibility reviews for the remainder of the Medicaid population, meaning many people would remain on the program even if they become ineligible for it.
Obamacare also required states to enroll abled-bodied people, calculated based on modified adjusted gross income, or MAGI, based on self-attestation of many personal characteristics like income. President Joe Biden’s CMS proposal extends self-attestation for certain types of income to the remaining populations seeking eligibility on a non-MAGI basis. This means that if the state decides to verify information, they must allow the applicant at least 90 calendar days from the date of the request to respond. If the applicant is found ineligible, the state would have inappropriately made three months’ worth of improper payments with virtually no possibility to recoup.
Biden’s proposal is akin to the honor system — and government audits show numerous problems with this approach. The only way to prevent misspending and abuse is to scrap self-attestation and put people on the program only after they are found eligible.
There are many more problems with this misguided proposed rule. For example, another provision would prohibit states from collecting small premiums from recipients, eroding personal responsibility and exacerbating waste. This prohibition would cost taxpayers more money and disengage recipients from their healthcare decisions. In addition, the proposed rule would allow applicants to deduct their estimated medical expenses from their income and put numerous hurdles in place to stop states from removing ineligible recipients.
CMS even admitted this rule might pose administrative burdens and costs on states, including $30 billion from the higher enrollment from this rule as well as additional costs for technology, staff additions, and compliance burdens.
We need more program integrity to shore up Medicaid for those truly in need, not more loopholes and ways for ineligible people to remain on the program. Medicaid’s improper payment rate before the pandemic was 22%, costing taxpayers nearly $100 billion annually and nearly triple the pre-Obamacare improper payment rate. It is now likely much higher. Moreover, the Congressional Budget Office has also reported a surge in people with multiple sources of coverage. In other words, millions of people with Medicaid also have employer coverage. These are real problems that waste taxpayer dollars and harm those who truly need the program.
Instead of making it easier for ineligible people to get on public welfare, the Biden administration should prioritize resources for the vulnerable and disabled by reducing the surge of Medicaid waste, fraud, and abuse. As a start, scrap this proposed rule’s express lane eligibility pathway.
Gary D. Alexander is head of the Medicaid and Health Safety Net Initiative at the Paragon Health Institute and the former Department of Health and Human Services secretary for Pennsylvania and Rhode Island.
