Gop’s medicaid trims won’t tame the beast — here’s how to restore sanity

This week, House Republicans are laboring to pass proposals to reform Medicaid, the fast-growing system of federal funding for states to deliver health care to low-income Americans, as part

of President Trump’s “big beautiful” budget bill. Their proposal creates the appearance of generating substantial savings by nudging states to restrict enrollment — notably by mandating an

80-hour-per-month work requirement for able-bodied adults to receive the benefit. Liberals responded to the House’s modest proposals with predictable outrage. Matthew Yglesias called it a

“war on the poor,” arguing that the bill’s cuts “will cause 8.6 million people to lose their health insurance.” Massachusetts Rep. Lori Trahan deemed it “federal overreach, plain and simple,

with devastating consequences for the people we represent.” EXPLORE MORE Critics’ outrage is surely overblown: From 2003 to 2023, Medicaid’s annual cost to federal taxpayers surged from

$161 billion to $616 billion. The Republicans’ proposals would merely slow the program’s _further _spending growth over the coming decade, from 4.6% per year to 3.7% — and even that

reduction in growth is likely to overestimate the savings that would occur. To offset the cost of extending the 2017 tax cuts, the House GOP has attempted to maximize the Congressional

Budget Office’s estimate of savings resulting from its proposed reforms to Medicaid. But CBO estimates don’t account for likely hurdles to implementation, such as states finding ways to

evade intended cost controls. Given such hurdles, the savings and coverage loss are both much less than they’re cracked up to be. This is by design — and it reflects the GOP’s tiny

majorities in both houses of Congress, combined with political pressure from governors and health-care providers who stand to lose revenues. Take those work requirements: The bill allows

part-time “community engagement” activities to satisfy the obligation — and states have proven adept at using token employment arrangements to nullify similar mandates in the past. The bill,

as it stood late Wednesday, would not even allow states to implement work requirements until 2029. The House GOP bill may nonetheless generate some modest genuine savings through its

tightened enforcement of means tests, for example. But it doesn’t do nearly enough to address the fact that Medicaid spending is skyrocketing because liberal states can claim several dollars

in federal aid for every dollar they spend on the program – without _any_ upper limit.  From 2019 to 2023, for example, New York’s level of Medicaid spending per person increased by more

than the entire cost of Florida’s program. The Empire State now spends three times as much.  In 2023, New York’s Medicaid program paid family members $9 billion to look after their elderly

relatives, which even Gov. Kathy Hochul labeled “a racket.”  GET OPINIONS AND COMMENTARY FROM OUR COLUMNISTS Subscribe to our daily Post Opinion newsletter! THANKS FOR SIGNING UP! Yet her

recent budget proposes a further 17% increase in such spending — which the federal government will have to match. Instead of struggling to make tiny cuts to Medicaid, conservatives in

Congress should instead focus on stopping states from further expanding it with programs that prove politically irreversible once they go into effect. Medicaid spending is rising so fast

because the federal government provides between $1 and $9 for every $1 that states spend, without any cut-off mechanism.  This offers all states a fantastic return on investment — offering

the most profitable benefits to the wealthiest states. States like New York are increasingly trying to get federal Medicaid funding for housing, transportation and other welfare services, by

citing incidental benefits to health. Since 2016, they have dodged federal rules by overpaying private insurers, with the understanding that the insurers will use the funds for normally

prohibited purposes.  In 2024, insurers made $110 billion in these “state-directed payments.” Republicans have long sought to cap the growth of Medicaid funding for each state — but they

have struggled to identify a numerical cap flexible enough to let states cover basic costs during economic recessions, when enrollment increases.  Such a cap would do nothing to stop states

from expanding their benefits during business-cycle upturns, when the program’s cost is _falling_ and they have spare funds to spend.  It’s time for Congress to simply ban high-spending

states from unilaterally expanding Medicaid benefits and eligibility.    An outright ban would be easier to administer than state-by-state spending caps, and would avoid the need to debate

funding limits. Federal law already stops low-spending states from _cutting_ Medicaid benefits, eligibility and payments below a set floor.  It only makes sense to set similar rules

establishing a ceiling for high-spending states as well. Benefit expansions enacted by spendthrift states account for much of Medicaid’s runaway growth.  Republicans won’t slow that growth

by taking access to care away from existing Medicaid beneficiaries — they just need to cut off the cash spigot and stop states from claiming ever more money via brand-new benefits. _Chris

Pope is a senior fellow at the Manhattan Institute. Adapted in part from City Journal._