Republicans, including Trump, won’t fix anything if it costs votes.
Ass Backward Logic from the Wall Street Journal
Check out the opening gambit in the WSJ article on The Politics of Medicaid Reform
If Republicans are too timid, costs will expand and Democrats will benefit at the ballot box.
Congress has an opportunity to reform Medicaid, the nation’s third-largest, and most flawed, entitlement program. Done right, reform could protect the vulnerable, promote private coverage and save hundreds of billions of dollars. Done wrong, it won’t reduce federal spending and will hurt Republicans at the ballot box by making more voters dependent on government welfare.
Medicaid’s financing is fundamentally broken. Because of ObamaCare, the federal government pays $9 for every $1 of state spending on able-bodied working-age adults, compared with roughly $1.33 for pregnant women and disabled children. That incentive pushes states to favor healthy adults over the vulnerable in enrollment and access to providers and better services.
States also use mechanisms such as the Medicaid provider tax to distort federal-state fiscal responsibility. States tax hospitals and insurers, then use that revenue to increase Medicaid payments back to the same entities. These inflated payments trigger higher federal matching funds. The result: States recycle money through the system and extract substantial federal money with little real state contribution.
To cover their 10% share of ObamaCare expansion costs, many states rely on provider-tax schemes—creating no incentive to spend responsibly and undermining the federal-state Medicaid partnership. Some states, such as California, use these mechanisms to extend Medicaid to illegal immigrants, shifting the cost to federal taxpayers.
Ten Republican-led states resisted ObamaCare’s Medicaid expansion and kept Medicaid’s focus on the most vulnerable. Low taxes and limited welfare have attracted people to move to these red states, which include Florida, South Carolina and Texas.
But if Republicans enact modest changes—particularly work requirements for able-bodied adults to receive benefits—without fixing Medicaid’s core financing problems, Republican governors will have political cover to tap into the federal Medicaid money they have left on the table by not expanding. If Congress fails to reduce ObamaCare’s 90% reimbursement and doesn’t limit Medicaid financing gimmicks, expect a wave of new expansions blessed by a bill passed by a Republican Congress and signed by President Trump.
If Congress doesn’t enact these structural reforms, the Medicaid-industrial complex will collude with the states for richer payments funded through higher debt, inflation and taxes. In some states, Medicaid payments to hospitals now approach or exceed twice the Medicare rate, which could threaten seniors’ care. And without reform, states will continue to prioritize healthy working-age adults ahead of children and the disabled. Meanwhile, Republicans will have missed an opportunity to restore Medicaid’s core mission: providing a safety net for the vulnerable, not corporate welfare for the healthcare industry.
Republicans who ran on reining in Washington’s excesses and defending the needy shouldn’t preserve Medicaid’s financing inequities and money-laundering schemes. Fix the incentives now or watch federal spending—and Democratic turnout—soar on the back of a program conservatives failed to reform when they had the chance.
What a Hoot
The authors are correct on what ails Medicaid. But the lead sentence, “If Republicans are too timid, costs will expand and Democrats will benefit at the ballot box,” is ass backwards.
Republicans don’t want the blame for fixing Medicaid.
Look no further than the Newsweek column Republicans Warn Trump Admin About Medicaid Cuts
As Republicans debate how to rein in federal spending following President Donald Trump’s latest round of tax cuts, a proposed shift in Medicaid funding is drawing resistance: not from Democrats, but from within the GOP.
Moderate and battleground-district Republicans, including Representatives Mike Lawler of New York and Don Bacon of Nebraska, are publicly warning party leaders not to go too far in overhauling the safety net.
The proposal at the center of the debate is known as a “per capita cap,” a policy that would limit federal Medicaid payments to a set amount per enrollee. Though supporters argue it wouldn’t technically cut benefits, critics say it would gradually shift costs to states and potentially reduce access to care.
GOP leaders say no final decision has been made, and the party remains divided. Lawmakers in politically vulnerable seats are warning that any proposal perceived as a cut to Medicaid could be harmful in 2024 swing districts.
Representatives Lawler and Bacon are part of a loose coalition pushing leadership to focus on other cost-cutting measures, such as fraud reduction and administrative streamlining, that wouldn’t reduce access to care.
In addition to Lawler and Bacon, other Republicans have signaled caution.
Representative Jeff Van Drew of New Jersey said he would support “guardrails” on Medicaid growth but opposes cutting the 50 percent federal match for traditional Medicaid.
House Speaker Mike Johnson has not publicly committed to including the caps in a budget deal, and negotiations are expected to continue through the summer.
“Some Republicans are growing concerned – and rightfully so,” Beene said. “If their state is dependent on that funding, any cap put on federal Medicaid spending could create a domino effect that would hurt beneficiaries in their state.”
Thompson said the states that rely most heavily on Medicaid expansion are Republican strongholds.
Buying Votes for a “Big Beautiful Bill”
Trump will buy as many votes as it takes to get support for his “big beautiful bill”.
Number one on the table is restoration of State and Local Tax (SALT) deductions. This benefits Democrats and Republicans in Big Blue states, especially New York.
The Committee for a Responsible Budget estimates full restoration of SALT would cost $920 billion over 10 years.
The TCJA tax extension will cost $3.9 trillion.
Why stop there?
Trump wants to but more votes with no tax on tips, no tax on Social Security benefits, and new deductions for interest on auto loans.
No DOGE to the Rescue
To pay for all of this DOGE has come up with $150 billion in alleged savings of which only about $12 billion is real.
For discussion, please see How Much Money Has DOGE Really Saved, and Where Will it Go?
Let’s do some fact checks on DOGE claims and reality.
Trump Promises $1 trillion in Defense Spending for Next Year
Also note Trump Promises $1 trillion in Defense Spending for Next Year
Even bigger budget deficits are now in store due to the first $1 trillion defense budget.
Rather than do the right things, Republicans will buy whatever votes they need to pass a budget-breaking monstrosity.
Meanwhile, the lies that it will pay for itself continue along with praise from the cult.
For discussion of the truly absurd, please see Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
Trump won’t drain the swamp. He is the swamp willing to tell whatever lies he needs to get his big beautiful bill passed.
Positing here that making medicaid dependent on work would be racist in a world where middle age white men cannot get any kind of reasonable job fitting their education level
I can attest to the truth of that
And you better not touch ANYTHING if you are raising “defense” (really offense) spending to over a trillion instead of cutting it by 40 or 50%
I would write a string of four letter words here aimed at these morons if this were a different site
No tax on tips? So I can terminate my employees, then pay them in tips and ask them for 10% of their tax free earnings? Asking for a friend.
How about we rip up our contracts and instead of paying annual bonus it will be a tip?
Is that tax free? Asking for another friend.
Can I pay all my overtime in the form of tips? Asking for another friend.
Can we all freelance and just get paid in tips? I am running out of friends here.
people thought obamacare end goal was medicare for all. it was medicaide for all. so far it’s working. in some states it is huge percent of folks on medicaide. btw in many places it is cadillac plan style benefits. for nada. of course someone pays. why not stop trying to control the entire globe including the 7 seas as aggressive policemen and take care of our own here? sounds cuckoo to even type that. what the hell, bombs away. somewhere amerikan bombs are dropping. always for the past 60 years.
let’s cut through this garbage. europe with many different schemes. some countries private, some public………all do healthcare for humans at half the cost in usa. in japan it is one third the price. usa is an empire of grifters. doctors, patients, bankers, politicians……….the rest is eyewash and spinning plates. i vote in 2 us states and one eu nation.
You forgot lawyers.
What a bunch of blabber none of this makes any sense. Medicare, nobody wants to be on it or can even afford what it has become. The billing system is a disaster biased on income is laughable.
What I would do is FIRST stop big pharma from advertising on TV. SECOND require cost sheets during any hospital visit. THIRD split-up the 4 largest hospital chains (unions) FIFTH reform the drug patent system and limit coverages by insurance companies for less than effective drugs. SIXTH jail Fauci.
Does our Federal Government do ANYTHING right?
I thought not!
They NEED to add work requirements AND recipients need to have some type of cost sharing. Medicaid should be limited to no more than two years per person in their lifetime. Medicaid shouldn’t be a lifetime welfare program.
unfortunately, some people have lifetime problems. Like schizophrenia that requires lifetime medication (long acting injectables) that cost well over 40,000 a year . against the rules for the government to negotiate prices, illness becomes pharmaceutical gold mines. crazy usa. also follow that stats Canadians live longer.
I am a healthcare provider at a large level 1 trauma center. You all clearly have no idea how the healthcare system or medicaid work. I’d say and 2/3 of my patients are on either medicare or medicaid. Medicaid patients are often able bodied and some of the most obnoxious and entitled people you will ever come across. The medicaid expansion absolutely ruined healthcare and grew entitlement by leaps and bounds. They have NO COPAY for presciptions that seniors on medicare are forced to pay. Enrollement needs to be tightened up or limited for able bodied citizens. The amount of money wasted on these people is astronomical.
“You all clearly have no idea how the healthcare system or medicaid work. I’d say and 2/3 of my patients are on either medicare or medicaid. Medicaid patients are often able bodied and some of the most obnoxious and entitled people you will ever come across. ”
If you could read, that is what the post said.
Might I suggest reading comprehension lessons?
First, my comment was aimed mainly at the “medicare for all” types in the comments who clearly do not understand that their idea would only further destroy the healthcare system and exacerbate moral/fiscal bankruptcy. Not you.
Secondly, I find you to be arrogant, pompous, and generally unpleasant which is why I tend to avoid this blog and never posted until today. Have a nice day.
congressional benefits for all!!!!
What I would do is FIRST stop big pharma from advertising on TV. SECOND require cost sheets during any hospital visit. THIRD split-up the 4 largest hospital chains (unions) FIFTH reform the drug patent system and limit coverages by insurance companies for less than effective drugs. SIXTH jail Fauci.
wrong… they have a 1 dollar copay but rarely have the cash. if you didn’t spend the money then many would be in institutions or jails and same amount of money spent .
Why not keep SALT as is and not extend TCJA? That is about $4T over ten years. The SALT cap currently hurts me but I am willing to forego a raise in the cap in order to bring some fiscal sanity. The TCJA didn’t do what it was supposed to do except decrease taxes. A lot of people said that it would pay for itself, ha.
Medical care is 17% of GDP. We need to cut that in half. Maybe we need to be like Logan’s run. There is no incentive for consumers to worry about healthcare costs, no one pays for it directly.
I’m also hurt by the SALT cap.
My issue with it is either no one should get that deduction or everyone should get the full deduction. I disagree with a cap.
Something tells me that even if they wanted to fix it, that no one has any clear idea how. More importantly it would take way more than 6 months time to craft such a bill even if it would pass via rubber stamp.
Cutting out the exorbitant contributions that the Federal government is responsible for seems like the only thing they can do that would actually make any real dent in the runaway costs. Question is, what States will get on board with that when they have a conflict of interest via getting that Federal money.
Project 2025 would convert federal medicaid funding to block state grants or per capita caps.That would help reduce the state gaming of funds and favored entitlement to able-bodied recipients. The current quantitative self-assembly SPX incipient fractal decay model is a 3 February 2025 14+/32/20 of 31-33 day :: x/2-2.5x/2-2.5x 3-phase decay series analogous to the DJIA August 1929 12/29/27 day :: x/2-2.5x/2-2.5x 3-phase decay series with the crash devaluation within terminal trading portions of the 3rd fractals.
… 3 February 2025 14+/32/21 of 31-33 day fractal decay series ….
Will someone please explain why Defense and Homeland security need so much money. If there was ever a place to find fraud and abuse I am sure it is the DOD. But strangely we do not discuss such things. My sense is that we have a few outdated weapon systems that could go in the trash. Instead we have a DOD secretary doing photo shoots. And increasing Homeland security to do what????? So we can send more money to Louisiana to house people in the country illegally. Insanity, I forgot, we need it for the most beautiful parade in the world
zion don’s big military birthday parade will be must see teeeveee. democracy works perfect. assholes elect assholes.
The Medicaid You Don’t Know You’re On: How Rebranding Hides Threats to Your Carehttps://healthcareuncovered.substack.com/p/the-medicaid-you-dont-know-youre
“Representatives Lawler and Bacon are part of a loose coalition pushing leadership to focus on other cost-cutting measures, such as fraud reduction and administrative streamlining, that wouldn’t reduce access to care.”
Well, you can have a very stream-lined administration not checking much so heavy fraud, or you can have little fraud with lots of bureaucratic review. Pick one.
If you want to fix Medicaid, simply pay physicians a fixed rate per hour with a half-hour minimum with the rate adjusted up or down based on specialty. Pay hospitals a fixed rate per day. Anyone doesn’t like the rate, they just won’t get paid for any Medicare, Medicaid, Obamacare, Tricare, or federal employee insurance. Then they can make a living off all the folks who will happily pay $2000/hour.
Your proposals won’t work because each state is different and Medicaid is mostly a state administered function.
So you are advocating a daylight cop on the beat or only patrolling rarely? How does that work on Wall Street?
The biggest fraudsters in the medical segment of the economy are from the supply side…
This is why regulation is haphazard and inconsistent or pay to play.
The entire US healthcare industry is broken and requires reform.
A for profit insurance and hospital sector cannot work given how the US system is currently structured with private equity in the hospital business and UNH, Humana, etc., constantly attempting to cancel procedures on subscribers in need of therapies, tests, etc., or charging co-pays, raising deductibles beyond the means of some workers, retirees, etc.
The solution is Medicare for all in the insurance industry, a return to community service hospitals and rural subsidies in the hospital sector.
Medicare for all is a progressive control fantasy not a path to better and cheaper care. Switzerland does just fine with private payers. The solution is definitely not to put the cretinous congressional authoritarians who designed the system in charge of the whole thing.
ryan lynn, The Swiss system is very good. It is ranked top 10 in the world. It is also a private system something the GOP and some Democrats would agree upon.
Did you know the authorities regulate it so there are no profits for mandatory basic coverage? Socialism. Did you know that everyone is guaranteed healthcare no matter their age or condition? Socialism.Did you know that it is ranked at the most expensive in Europe? So it is not cost effective. Did you know that private employers cannot insure their employees in Switzerland? Socialism.
Please read the below link for other aspects of the Swiss system.
There is one section that comments many of the attributes of the Swiss system is modeled on Medicaid. Given Mish’s article about Medicaid, I wouldn’t want it given the disparity of quality coverage and the cost to the states in the US and the cantons in Switzerland.
https://pnhp.org/news/understanding-the-swiss-watch-function-of-switzerlands-health-system/
Everyone hates big government except the beneficiaries. Medicaid cuts are already causing hospital closures in many rural areas and I fully expect that to continue to happen no matter what Congress does….throw a demographic death spiral on top of all the budget issues.
https://www.americanprogress.org/article/medicaid-cuts-would-threaten-rural-hospitals/
Because medicaid does not cover the cost of service. And if you rely on that you simply cant stay in business. Medicare in some instances pays 100% the cost of service so you cn survive.
Let them close. Hospitals and medical facilities need to learn how to budget. The tax payers shouldn’t fund lifetime welfare for people that are able bodied to work.