The economic recovery from the Covid-19 pandemic has been remarkable. April unemployment rates were at record highs in 17 states, and Friday’s labor report said the economy added 390,000 net new jobs in May. Yet the US Medicaid program is suffering from the long Covid.
In one of its 2020 aid bills, Congress temporarily increased the federal government’s contribution to Medicaid. As a condition of receiving the extra money, states cannot de-enroll Medicaid beneficiaries who become ineligible, only those who die, retire, or leave the state. This restriction lasts until the end of the official public health emergency.
So far, it’s mid-July, but media reports that the Biden administration is planning another extension and has also promised to give states 60 days notice. That could mean October at the earliest. By then, according to an estimate by the Foundation for Government Accountability (FGA), “states will have approximately 98 million Medicaid enrollees, of which as many as 23 million are no longer eligible.”
As with other pandemic makeshift aid, such as the eviction moratorium, the media will focus on difficult cases. But the emergency has to end one day, and an economy with a 3.6% unemployment rate is a good time to do so. The Labor Department also said this week that there were 11.4 million job openings in April, with only about half the number of workers available.
Congress is free to make permanent Medicaid eligibility rules easier if it can find the votes, and the White House is free to advocate for that. But a never-ending emergency is bad policy, and dishonest too, since the switch to Medicaid was seen as temporary.
Given that the federal Covid bonus is disappearing with the emergency, states had better be ready to make this transition. One question is whether governors with tight labor markets will decide not to wait. At some point, the extra federal Covid money under Medicaid may not be enough to cover the cost of transporting people who are ineligible but cannot be rostered.
By October, “ineligible enrollees will cost taxpayers nearly $16 billion a month,” the FGA predicts, “with states picking up nearly $6 billion of those costs when the public health emergency takes hold. end”. State officials would be wise to think about what to do next and remember that every dollar spent on an ineligible Medicaid recipient is a dollar not spent on other priorities, including more needy.
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the June 4, 2022 print edition.