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Build Back Better? Fix Medicaid First




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While Democrats are dreaming up ways to enlarge the welfare state, here’s a bracing statistic about America’s existing safety net: “The national improper payment rate for Medicaid is nearly 22 percent.” That quote is taken from a report this week by the Foundation for Government Accountability (FGA), and it gets worse from there.

That national figure is for 2021, and most of it, about 80%, is due to eligibility errors. To fill in the picture, the FGA sent records requests to individual states, whose errors are sampled on a rotating cycle. The group’s report cites figures for about a dozen. Top of the list was Ohio, with a bad payment rate of 44.3%. Illinois, a usual suspect, came in at 37.3%. Missouri was 31.7% and North Dakota 28.3%. Those are 2019 figures, the latest available for each state.

Eligibility errors mean that people receive benefits without evidence that they qualify. Such problems made up 98% of the total in Ohio, 95% in Illinois and 70% in Missouri, the FGA says. Yet the uncertainty is wide, as shown by the underlying documents, which the group shared with us. In Ohio, for example, 5.7% of improper payments were “a known monetary loss.” The rest was Medicaid dark matter, “payments where there is no or insufficient documentation.”

Some of Ohio’s errors involved missing records, such as when the case files indicated “that income was verified,” but “sufficient documentation was not maintained to complete a review.” In other instances, “there was no indication in the case record that income was verified by the caseworker,” or else the periodic eligibility redetermination “was not conducted.” How many of these people truly qualified for Medicaid? Who knows.

Those are 2019 numbers, so they’re free of pandemic problems. But since Covid-19 hit, millions more Americans have joined Medicaid’s rolls. Congress passed an aid bill in 2020 that included a bump in matching funding. But as a condition on that money, states cannot un-enroll Medicaid beneficiaries for the duration of the emergency, unless the person moves out of state or explicitly asks to quit the program.

What was driving errors before Covid? “It is no coincidence,” the FGA says, “that the two states with the highest publicly available improper payment rates have expanded Medicaid under ObamaCare.” Since that expansion, the national rate of bad payments has “nearly quadrupled.” The report suggests that states do better at “cross-checking Medicaid enrollees against death, employment, wage, and residency records,” while putting an end to “self-attesting to eligibility without verification.”

President Biden’s Build Back Better plan would expand Medicaid, while creating new entitlements for child care, preschool, and more. Here’s an idea: Before Congress spends billions of dollars on tomorrow’s Great Society, it should deal with the fact that Medicaid cannot account for more than $1 out of every $5 it spends. If Mr. Biden could figure out how to Mend Medicaid Majorly, maybe the public would trust him with something bigger.

Journal Editorial Report: Inflation threatens the president’s political and economic agenda. Images: AFP/Getty Images Composite: Mark Kelly

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Appeared in the January 24, 2022, print edition.



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