Why It’s So Hard to Control Medicaid Spending

This is Avik Roy, writing at Forbes about the Medicaid program in President Obama’s home state:

Illinois has one of the most expansive Medicaid programs in the country, with annual state and federal spending of $15 billion. That compares to a state budget of $33 billion. In the Land of Lincoln, you can qualify for Medicaid if your income is under 200 percent of the federal poverty level—$44,700 for a family of four. Children qualify at 300 percent of FPL. One out of every five Illinoisans is on Medicaid, including one-third of all Illinois kids.

But in order to prove that you’re eligible for Medicaid in Illinois, all you have to do is provide a single pay stub. If that pay stub happens to be artificially low, suggesting a lower income than you actually have, it still counts as “proof” of Medicaid eligibility. As to proving Illinois residency? The nice people of Illinois merely ask that you write down your address. As a result, people earning more than the Medicaid threshold, and people who don’t even live in Illinois, are collecting Illinois Medicaid funds.

So in January, the State of Illinois, under a Democratic House, a Democratic Senate, and a Democratic Governor, passed a landmark Medicaid reform bill aimed at fixing this and other problems with the program. The new law required the state’s Medicaid recipients to provide a month’s worth of pay stubs, instead of just one, in order to provide evidence of residency and income. Not a big deal, you might think.

You’d be wrong. In July, the federal Centers for Medicare and Medicaid Services informed Illinois that the seemingly innocuous reform violated federal law, because Obamacare doesn’t allow states to restrict Medicaid eligibility, and this reform, they decided, was an eligibility restriction.

Comments (8)

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  1. Devon Herrick says:

    This is an example of why states should be very careful when they accept government handouts. How ludicrous is it for the Dept. of HHS to claim Illinois is restricting Medicaid eligibility when the law stipulates who is eligible? All the new law is doing is verifying they those who enroll are actually eligible.

  2. Brian Williams. says:

    Providing a month’s worth of pay stubs is pretty restrictive, especially if you don’t have a job.

  3. Clark says:

    It’s just one more pot of money people can dip into –all paid for by taxpayers.

  4. KG says:

    The fact that proof of residence isn’t required is bizarre. When I went to vote in Illinois, I brought two pieces of mail to confirm my address, along with my driver’s license to confirm my identity. No one asked for either.

  5. Richard Walker says:

    One wonders why Illinois was able to sustain this policy for so long, yet it violated federal law.

  6. Bart Ingles says:

    KG, I’ll bet they’ll ask for proof of residency if you try to enroll your kid in one of the more popular public schools in your area.

  7. Carolyn Needham says:

    And they wonder how we can reduce waste and fraud in Medicaid…

  8. Choirul says:

    1. Ole Buckwheat has given > 700 Companies and SEIU Union types a waver on this Great Socialists Healthcare takover.2. Why do we allow our Politicans to cliannutloy SHIT on US?3. Why are THEY Better than the people who put them into office?4. Why do we NOT Force them to enjoy the SAME Shit Policies and Programs they establish for the general population?