Kill The Medicaid Entitlement

By Dick Morris on July 19, 2017

If the Republicans fail to repeal ObamaCare or to replace it with another program, they need to repeal the Medicaid expansion and entitlement granted by the Affordable Care Act statute.

Medicaid is driving the deficit and federal spending like no other program. While total federal outlays have risen by 23% since 2010, Medicaid spending has jumped up by 48% – from $402 billion to $595 billion.

The ObamaCare replacement bills broke new ground in finally recasting Medicaid as a capped appropriation each year rather than an entitlement. States would have to live within the caps but could allocate the money as they see fit. They would also be free — as they are not now — to enact co-pays to limit utilization and require work for benefits as they now do for welfare.

And, if Medicaid is recast as the House Bill and all draft Senate bills did, states could fill the giant void that now exists in efforts to police Medicaid to stop fraud and abuse. Since its money is part federal and part state, nobody takes the task of assuring integrity seriously. As a result, the Government Accounting Office estimates that 11% of the program’s funds are spent fraudulently.

To permit Medicaid to grow without limits is having a huge effect on state funding for education and all other purposes as out schools compete for dollars. While the legislatures must allocate the funds for schools, the Medicaid money flows directly and without legislative oversight through the entitlement program.

It’s not a fair fight. While total state, federal, and local education funding has been essentially flat since 2010, Medicaid has grown by half.

Many see no difference between repealing ObamaCare and letting it die. But the letting it die option only impacts the insurance side of the program. The Medicaid side would not die and will only end if it is repealed.

For two decades, Republicans have tried to make Medicaid a capped program funded by legislative appropriations. Now, on the verge of success in this heroic and major undertaking, their quarrelsome members have stopped the plan for reasons having nothing to do with Medicaid.

Congress must, at least, repeal the Medicaid entitlement as a stand-alone bill, even if it cannot legislate a solution to the overall problem of ObamaCare replacement.

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