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Yahoo
23-05-2025
- Politics
- Yahoo
Opinion - States should cut the federal cord and end dependency on Washington
In most blue states at least, President Trump's second term is creating a battle over how the states can use federal money. Many Democratic governors are suddenly defending state control and pushing back against Washington's influence. But the reality is that too many states resemble satellites orbiting Washington rather than sovereign governments charting their own course. In 2022, more than half of Louisiana and Alaska's budget came from federal funds. Twenty states receive more than 40 percent of their dollars from Washington. North Dakota is the supposed bright light at just over 22 percent. To regain federalism's footing, states need to reassert more political courage and financial independence from Washington's tentacles. Trump, who found a winning electoral issue on opposing transgender ideology, threatens to pull education funds from states that fail to comply. Trump quickly repositioned the intent of the Title IX law back to its original purpose, calling for only biological females to compete against biological females in athletics. States like Maine strongly oppose the requirement. Rather than reform their reliance on federal dollars, however, states typically respond by suing to keep the federal spigot flowing, reinforcing perpetual dependence over fiscal disentanglement. Some states use federal dollars to mask over budget shortfalls, even using money to indirectly subsidize state tax cuts. Federal aid too often lets states avoid the hard budgeting and governance decisions that should fall to lawmakers. The most obvious example is the Medicaid expansion under the Affordable Care Act, where the federal government sweetened the pot for states by covering 100 and then 90 percent of the cost for able-bodied, working-age, childless adults. It's important to remember that while states were receiving these 90 percent reimbursement rates from the Feds for this population, another group of Americans were being pushed to the back. The disabled, pregnant women, and children — those for whom Medicaid was originally designed — have had to fight for healthcare access as the result of federal interference. Some states even enshrined expansion into their state constitutions while looking the other way when it comes to unsustainable federal spending levels. It remains unclear whether the federal government will make a serious effort to achieve meaningful Medicaid savings — even if it means limiting coverage for able-bodied but nonworking childless adults. Medicaid expansion has become an elaborate money-making endeavor for states to harness more and more from taxpayers with no skin in the game. 'All these tactics let states rake in massive federal dollars without any state cost and reduce the pressure on state policymakers to responsibly govern and weigh tradeoffs between spending and tax policies,' wrote Brian Blase, president of Paragon Health Institute. Although fraud and abuse under expansion is too lengthy to document, a 2019 Pelican Institute report after expansion in Louisiana noted that 1,672 Medicaid recipients had incomes over $100,000, and at least one household had an income higher than then-Gov. John Bel Edwards (D). A 2025 report from the Foundation for Government Accountability reveals how California exploits funding loopholes to cover illegal immigrants under Medicaid, costing federal taxpayers nearly $10 billion in clear violation of federal law. Disaster relief is another example. So much aid comes from the federal government, often 75 percent when an emergency declaration is made, that it can heavily disincentivize states from building their own rainy-day funds. It also reduces the incentive to invest in infrastructure resilience or take proactive steps to mitigate risk. The result is greater dependence on Washington, rather than increased responsibility. After Hurricane Helene, some federal lawmakers tried to deregulate disaster relief, but as North Carolina's John Locke Foundation warns, 'the fiscally unstable federal government cannot be counted on to be a reliable partner in disaster relief efforts.' Ultimately, given Washington's dysfunction and inability to prioritize spending, the political environment provides not just an opportunity to question federal funds, but lower the political temperature by making more decisions at the state and local level. Federalism is more than a dusty concept to admire from afar. It's a set of common-sense principles to restore trust in government and give people real power over their communities and destiny. The alternative is for Americans to continue watching their states orbit as satellites of expanding federal power, letting Washington's dysfunction pull us further away from self-government. Ray Nothstine is a senior writer and editor and a Future of Freedom Fellow at the State Policy Network. He manages and edits American Habits. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
23-05-2025
- Politics
- The Hill
States should cut the federal cord and end dependency on Washington
In most blue states at least, President Trump's second term is creating a battle over how the states can use federal money. Many Democratic governors are suddenly defending state control and pushing back against Washington's influence. But the reality is that too many states resemble satellites orbiting Washington rather than sovereign governments charting their own course. In 2022, more than half of Louisiana and Alaska's budget came from federal funds. Twenty states receive more than 40 percent of their dollars from Washington. North Dakota is the supposed bright light at just over 22 percent. To regain federalism's footing, states need to reassert more political courage and financial independence from Washington's tentacles. Trump, who found a winning electoral issue on opposing transgender ideology, threatens to pull education funds from states that fail to comply. Trump quickly repositioned the intent of the Title IX law back to its original purpose, calling for only biological females to compete against biological females in athletics. States like Maine strongly oppose the requirement. Rather than reform their reliance on federal dollars, however, states typically respond by suing to keep the federal spigot flowing, reinforcing perpetual dependence over fiscal disentanglement. Some states use federal dollars to mask over budget shortfalls, even using money to indirectly subsidize state tax cuts. Federal aid too often lets states avoid the hard budgeting and governance decisions that should fall to lawmakers. The most obvious example is the Medicaid expansion under the Affordable Care Act, where the federal government sweetened the pot for states by covering 100 and then 90 percent of the cost for able-bodied, working-age, childless adults. It's important to remember that while states were receiving these 90 percent reimbursement rates from the Feds for this population, another group of Americans were being pushed to the back. The disabled, pregnant women, and children — those for whom Medicaid was originally designed — have had to fight for healthcare access as the result of federal interference. Some states even enshrined expansion into their state constitutions while looking the other way when it comes to unsustainable federal spending levels. It remains unclear whether the federal government will make a serious effort to achieve meaningful Medicaid savings — even if it means limiting coverage for able-bodied but nonworking childless adults. Medicaid expansion has become an elaborate money-making endeavor for states to harness more and more from taxpayers with no skin in the game. 'All these tactics let states rake in massive federal dollars without any state cost and reduce the pressure on state policymakers to responsibly govern and weigh tradeoffs between spending and tax policies,' wrote Brian Blase, president of Paragon Health Institute. Although fraud and abuse under expansion is too lengthy to document, a 2019 Pelican Institute report after expansion in Louisiana noted that 1,672 Medicaid recipients had incomes over $100,000, and at least one household had an income higher than then-Gov. John Bel Edwards (D). A 2025 report from the Foundation for Government Accountability reveals how California exploits funding loopholes to cover illegal immigrants under Medicaid, costing federal taxpayers nearly $10 billion in clear violation of federal law. Disaster relief is another example. So much aid comes from the federal government, often 75 percent when an emergency declaration is made, that it can heavily disincentivize states from building their own rainy-day funds. It also reduces the incentive to invest in infrastructure resilience or take proactive steps to mitigate risk. The result is greater dependence on Washington, rather than increased responsibility. After Hurricane Helene, some federal lawmakers tried to deregulate disaster relief, but as North Carolina's John Locke Foundation warns, 'the fiscally unstable federal government cannot be counted on to be a reliable partner in disaster relief efforts.' Ultimately, given Washington's dysfunction and inability to prioritize spending, the political environment provides not just an opportunity to question federal funds, but lower the political temperature by making more decisions at the state and local level. Federalism is more than a dusty concept to admire from afar. It's a set of common-sense principles to restore trust in government and give people real power over their communities and destiny. The alternative is for Americans to continue watching their states orbit as satellites of expanding federal power, letting Washington's dysfunction pull us further away from self-government. Ray Nothstine is a senior writer and editor and a Future of Freedom Fellow at the State Policy Network. He manages and edits American Habits.
Los Angeles Times
29-04-2025
- Health
- Los Angeles Times
Inside the GOP's secret plan to destroy Medicaid
You may have heard some of our federal lawmakers attest to their respect for Medicaid and its generally low-income enrollment base. Listen to House Speaker Mike Johnson (R-La.) on Fox News a couple of weeks ago talking about the need to preserve the state-federal program so it serves 'young single mothers down on their fortunes for a moment, the people with real disability, the elderly.' As articulated by Johnson and other GOP lawmakers, this idea seems pretty unexceptionable. Unless, that is, you examine what's really behind this declaration of service for the less fortunate among us. What they're really talking about is killing the Medicaid expansion that was passed as part of the Affordable Care Act in 2010. They have a plan to do exactly that. It's not exactly secret, but it's abstruse enough that they hope most people, who aren't fully conversant with the complexities of the program, won't get the drift. So I'm here to explain what they're up to. To understand, you have to be aware of two facts. One is that the federal government contributes 90% of the cost of medical service for expansion enrollees. The other is that the federal match for traditional Medicaid, which principally serves low-income families with children, is lower. It varies state by state and ranging from 50% for wealthier states such as California to more than 70% for poor states such as Mississippi, Alabama and West Virginia. The idea floating around in the GOP caucus is to reduce the expansion match to each state's level for traditional Medicaid. The idea can be found in Project 2025 and in a proposal from the Paragon Health Institute, which has been funded in part by right-wing foundations, including the Koch network. Make no mistake: This is an effort aimed at destroying Medicaid expansion programs. The healthcare of as many as 21 million Americans is at stake; that's how many people are receiving health coverage via the Medicaid expansion. 'Medicaid expansion is responsible for the largest share of the reduction of this nation's uninsured rate,' says Joan Alker, a Medicaid and children's health expert at Georgetown University. That rate fell from 16% when the ACA was passed to about 8% now. Not only would expansion enrollees be affected: Medicaid is the biggest source of federal dollars flowing to the states, coming to $616 billion for state and local governments in fiscal 2023, swamping the sum provided by the second-largest program, the federal highway trust fund, which funneled $47.7 billion to them. The match reduction would amount to about 10% of total Medicaid funding per year. 'There would be no good way out of this for any state, no matter how rich or well-intentioned,' Alker told me. 'It's simply too much money.' Some Republicans seem to understand that implication, as well as the popularity of Medicaid among the voting public. In an April 14 letter to the House Republican leadership, 12 GOP representatives stated that they would not support any budget bill that 'includes any reduction in Medicaid coverage for vulnerable populations.' They were walking on a razor's edge, however, by also echoing Johnson in endorsing 'targeted reforms ... that divert resources away from children, seniors, individuals with disabilities, and pregnant women — those who the program was intended to help.' Among the signers was Rep. David Valadao (R-Hanford), whose Central Valley district has 139,800 expansion enrollees, one of the largest such cadres in California. I asked Valadao's office to clarify his position but got no response. Before delving into how changing the federal match would affect Medicaid, a few more words about the partisan context. Notwithstanding Republicans' protestations of reverence for Medicaid, the truth is that they and their fellow conservatives have had their knives out for the program virtually since its inception in 1965. They've assaulted it with lies and misrepresentations for years. As Drew Altman of the health policy think tank KFF has astutely observed, conservatives' historical disdain for Medicaid derives in part from the divergent partisan views of the program: 'Democrats view Medicaid as a health insurance program that helps people pay for healthcare,' he wrote. By contrast, 'Republicans view Medicaid as a government welfare program.' Thinking of Medicaid as welfare serves an important aspect of the conservative program, in that it makes Medicaid politically easier to cut, like all 'welfare' programs. Ordinary Americans don't normally see these programs as serving themselves, unlike Social Security and Medicare, which they think of as entitlements (after all, they pay for them with every paycheck). From the concept of Medicaid as welfare it's a short step to loading it with eligibility restrictions and administrative hoops to jump through; Republicans tend to picture Medicaid recipients as members of the undeserving poor, which aligns with their view of poverty as something of a moral failing. That explains another frontal attack on Medicaid mounted by the GOP: the imposition of work requirements on Medicaid enrollees. This is a popular idea among Republican lawmakers despite evidence that they fail to achieve their putative goal of encouraging poor people to find jobs. Only two states implemented work requirements when they were authorized during the first Trump administration. Both were abject failures. In Arkansas, more than 18,000 people lost their coverage during the nine months the program was in operation, before it was blocked by federal Judge James Boasberg in 2019. (He was upheld by an appeals court, and the matter ended there.) In Georgia, state officials expected 345,000 people to apply for eligibility under its work rules; by late 2024, fewer than 4,500 people enrolled, in part because the administrative rules the state imposed were onerous. Georgia also discovered a seldom acknowledged reality about work requirements — they're immensely expensive to administer. In less than a year, Georgia taxpayers had spent $26 million on the program, almost all of it on administration instead of medical services. Work rules for Medicaid are the product of a misconception about Medicaid enrollees, which is that they're the employable unemployed. According to census figures, however, 44% of Medicaid recipients worked full time in 2023 and 20% worked part time. An additional 12% were not working because they were taking care of family at home, 10% were ill or disabled, 6% were students, and 4% were retired. Of the remaining 4%, half couldn't find work and the remaining 2% didn't give a reason. The Biden administration killed work requirements for Medicaid soon after it took office. That brings us back to Medicaid expansion. The Affordable Care Act used Medicaid to cover the poorest uninsured Americans, those with incomes up to 138% of the federal poverty level, or about $21,597 this year. The federal government would cover 100% of the new expense at first, ultimately declining to 90%, where it is now. A Supreme Court ruling made the Medicaid expansion voluntary for states; as of today, all but 10 have accepted the expansion. In those states, Medicaid eligibility was extended to childless adults for the first time. That's the source of the conservative shibboleth that 'able-bodied' men and women can receive Medicaid benefits — and of Republicans' assertion that the new cohort is 'draining the resources ... from the people who need it the most and are intended to receive it,' as Johnson asserted on Fox. Johnson's claim is that the new enrollees 'should never be on the program at all' — only the original Medicaid targets are legitimate. However, Congress authorized the addition of those new enrollees via an act that was signed into law by President Obama. On Fox, Johnson invoked another GOP shibboleth, which is that rooting out fraud, waste and abuse would help keep Medicaid solvent. That's fantasy. There really are only two ways to extract savings from Medicaid: strip benefits from the program, or throw enrollees out. Twelve states have so-called trigger laws that would either cancel expansion or require changes in the state program if the federal match rate dropped below 90%. Many others would have no option but to cut their Medicaid programs back if the match rate were cut. As the biggest state, California would be the biggest loser, with an estimated $129.4 billion at risk over 10 years, but every state would measure its loss in the billions, according to estimates by KFF. Who would be the winners? The millionaires and billionaires who might be spared a federal income tax increase, since the gain for the federal budget would be more than $626 billion over a decade. Republicans have been remarkably cavalier about the impact of cutting the expansion match. 'Nobody would be kicked off Medicaid, as long as the governors decided to continue to fund the program,' Rep. Austin Scott (R-Ga.) said last week on Fox Business. That was easy for Scott to say, if outstandingly cynical. Representing as he does the non-expansion state of Georgia, he knows that red state governors like his own would be inclined to simply ax the expansion if given a fiscal pretext to hide behind. The U.S. would fall deeper into a two-tier healthcare landscape, with conservative states cutting healthcare services and blue states trying to hold the line for their residents. 'I'd expect non-expansion states like Florida, Texas and Georgia to fight for this proposal, because they haven't expanded Medicaid and they wouldn't be affected,' Alker says.
Axios
26-03-2025
- Business
- Axios
Conservatives push to cut extra Medicaid payments to hospitals
A think tank with close ties to the Trump administration is making the case for wonky changes to state Medicaid payments that could solve a big problem for Republican lawmakers: They could cut federal spending in the name of simply cracking down on waste and abuse within the program. The big picture: State-directed Medicaid payments have grown rapidly, and there's been bipartisan support for reining them in. But slashing or getting rid of the payments would be a big financial hit for providers, and especially hospitals, who vehemently disagree that the payments are wasteful. Driving the news: Paragon Health Institute released a report Wednesday characterizing state-directed payments as "legalized Medicaid money laundering." States can tax providers or use other means to increase their state share of Medicaid funding, which allows the state to draw down additional federal Medicaid dollars. States can then use that extra money to increase payments to providers. "Not only do these programs sidestep the truly needy on Medicaid and favor special interests instead, but all this is financed by growing the federal debt, leading to inflation and higher interest rates," the report says. Zoom in: State-directed payment arrangements approved as of last August are projected to cost more than $110 billion per year, a nearly 60% increase over cost projections from early 2023. A small portion of these arrangements are driving most of the increase, according to independent Medicaid advisers to Congress. What they're saying: "All of this is fits within waste and abuse in the program," Paragon President Brian Blase, who co-authored the report, told Axios. "Congress, looking at $2 trillion budget deficits, needs to make significant reform to the federal-state partnership" in Medicaid. The report advocates for Congress to cap the amount of federal Medicaid funding states can receive, though it acknowledges that such a change is unlikely. The report also recommends other policy changes, like prohibiting states from using provider and insurer taxes to finance Medicaid payments, ending or capping state-directed payments and stopping policy consultants from being paid with Medicaid funds. Between the lines: The Government Accountability Office and independent Medicaid advisers have both said in recent years that state-directed payment arrangements need more oversight. Democratic lawmakers have also advocated changes to provider taxes. The Biden administration last year finalized a rule to increase transparency into state-directed payments. The Paragon report says the rule helped, but that it should still be repealed over fiscal concerns. The other side: Hospitals say patients' access to care could suffer without the supplemental payments. "Let's be clear: provider taxes and state directed payments provide the means to offset the crippling underpayment by Medicaid for critical care that meets the medical needs of so many kids, mothers, disabled, and seniors," Chip Kahn, president and CEO of the Federation of American Hospitals, said in a statement to Axios. Taking federal money out of the Medicaid system may ultimately force hospitals to cut back services or staff, affecting beneficiaries' access to care, said Megan Cundari, senior director of federal relations for the American Hospital Association. What we're watching: Blase said his team is having discussions with congressional offices.
Yahoo
16-03-2025
- Health
- Yahoo
Opinion - What to do about $1.1 trillion in improper Medicaid payments
As the 119th Congress seeks to reduce government spending through reconciliation, talk of Medicaid reductions has raised concerns about vulnerable populations losing Medicaid coverage. But simply following the law and paying only for what Medicaid allows would save hundreds of billions of dollars without ending coverage for any of Medicaid's intended recipients. According to official reports, the government issued $543 billion in improper Medicaid payments from 2015 to 2024. But that's only what the government measured. Based on the few years that the government performed full audits, I coauthored a report with Paragon Health Institute President Brian Blase that estimated that the true amount of improper payments is twice that, totaling roughly $1.1 trillion over the last decade. That's a whopping $8,200 per U.S. household. The primary reason for the discrepancy is that the Obama and Biden administrations excluded eligibility checks in their audits of improper payments in Medicaid. But eligibility errors and failures to properly assess eligibility prior to enrollment are the biggest sources of improper payments. Since Medicaid is a means-tested welfare program and includes different federal reimbursement rates based on enrollees' eligibility status, checking eligibility is crucial. In many cases, individuals who are not eligible for the program are enrolled in it, and in other instances, those enrolled are wrongly classified. The federal government reimburses states for between 50 percent and 75 percent of Medicaid costs for their traditional Medicaid enrollees — which includes children, pregnant women, seniors and individuals with disabilities — with lower rates in wealthier states. The Affordable Care Act expanded Medicaid to able-bodied, working-age and generally childless individuals, which crowded out access to care for traditional enrollees. Because expansion enrollees receive a much higher 90 percent federal reimbursement, states have the incentive to wrongly classify traditional enrollees as expansion enrollees. Moreover, hospitals can use presumptive eligibility, which is an expedited Medicaid enrollment process that permits hospitals to essentially enroll people into Medicaid based on only a few questions about income and household size and without verification. People receive temporary Medicaid coverage pending a review. The Foundation for Government Accountability found that in 2018, 70 percent of people deemed eligible by hospitals were eventually determined ineligible or did not complete the application and have their information verified. Measures taken during the COVID-19 pandemic — including increasing federal support of Medicaid so long as states did not update their eligibility requirements or remove ineligible people from the program — led to an estimated 20 million ineligible enrollees on Medicaid by the time President Biden finally declared an end to the public health emergency. Failing to even check for these eligibility errors in state Medicaid audits causes massive underreporting of improper payments. In 2019 and 2020 when the government conducted full audits that included eligibility determinations, the improper payment rates averaged 27 percent. When we apply a 25 percent improper payment rate for all years between 2014 and 2023, we estimate roughly $1.1 trillion in improper Medicaid payments. Much of this is money that should not have been spent if the federal and state governments were following the law. Congress enacted legislation directing the Health and Human Services secretary to push the cost of excessive improper payments back onto states by withholding federal funds for improper payments over three percent. Despite states routinely issuing improper payments many times that level, HHS has never withheld funds under that requirement. To automatically incorporate accountability into improper payment rates, Congress should require CMS to reduce future federal Medicaid reimbursements to high-offender states so those states, which are responsible for managing the programs, bear the cost of their failures instead of federal taxpayers. Moreover, to prevent underreporting of improper payments, federal policymakers should require states to conduct more frequent eligibility redeterminations, improve hospitals' presumptive eligibility enrollment and require full audits of improper payments including eligibility checks. Many changes are necessary to improve Medicaid and protect the integrity of federal taxpayers' spending on it. Following the law and cracking down on improper payments is a common sense first step that could provide hundreds of billions of dollars in Medicaid savings. Rachel Greszler is a visiting fellow in workforce at the Economic Policy Innovation Center and co-author with Brian Blase of the report, 'Medicaid's True Improper Payments Double Those Reported by CMS.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
