Medicaid’s original purpose was to be a safety net for people who could not adequately provide themselves with healthcare. The federal government matched funds from states to ensure eligible residents could get hospital care and physician visits. The partnership sought to strengthen state-led efforts to cover poor people who could not afford private insurance.
This idea of Medicaid being a lifeline for the poorest members of society persists in political debate and public memory, but it is no longer true. Medicaid today is the nation’s largest single source of healthcare funding, with 70 million-80 million enrolled, just less than a quarter of the population. It is the largest payer for long-term services and for mental health and substance use disorder services. In fiscal 2023, it cost taxpayers about $890 billion, with the federal government covering 69% and states contributing the remaining 31%. Medicaid spending will top $1 trillion a year by 2030, according to the Congressional Budget Office.
The program’s explosive growth since the passage of Obamacare in 2010 has greatly increased the federal deficit, creating a fiscal wreck and undermining the economy. Obamacare expanded Medicaid coverage to most non-elderly adults with incomes up to 38 percentage points above the Federal Poverty Level, which was dramatically above the previous threshold. It entitled a large new category of adult beneficiaries, including childless adults, and encouraged states to expand coverage by topping up their outlays with generous federal funding. A 2012 Supreme Court ruling allowed states not to expand their programs, but 41 states did so.
The One Big Beautiful Bill Act, which passed the Senate, includes much-needed reform of the 60-year-old program. Crucially, it changes eligibility and verification to cut abuse. It would help preserve and strengthen the program and realign it with its original purpose of providing a safety net to the poor. It would become less of an abused program that has, for a generation, eroded the successful 1996 Clinton-Gingrich welfare reforms.
A recent CBO report found that Medicaid includes 2.6 million ineligible people, and other studies suggest the number is even higher. Tens of billions of dollars are wasted each year because of administrative sloppiness and improper payments to ineligible adults who provide insufficient documentation.
FACT CHECK: THE TRUTH BEHIND CLAIMS THE ONE BIG BEAUTIFUL BILL ACT WILL CUT MEDICAID
Millions of able-bodied adults draw benefits without working, draining the overstretched system. The Senate bill required recipients to work 80 hours a month. This will discourage lazy and feckless people from applying for Medicaid, and it will help ensure that help can go to the truly vulnerable for years to come. Healthy people choosing not to work in a robust job market are defrauding the system and endangering people who truly need help. Republican politicians wavering in their support of the bill because of these reforms should understand that Medicaid fraudsters don’t vote Republican anyway. Support for unnecessary government handouts generally goes to Democrats. Imposing reasonable work requirements — those enacted by former President Bill Clinton in 1994 were far more stringent — ensures the solvency of Medicaid and fosters a culture that values individual responsibility, without which prosperity is impossible.
No rightful recipient of Medicaid should be “kicked off” the rolls. But that’s not what the new legislation does. If the Senate bill moves forward as it is, only those who should not have been on Medicaid will lose their handouts. Congress designed the program to protect only the most vulnerable. The Senate bill helps restore this original vision. Congress should adopt these measures to ensure America’s fiscal health and help the truly needy.