Federal Funds Create Perverse Incentives

There’s no such thing as a free lunch, just like there’s no such thing as free money from the federal government. But you wouldn’t know that by reading a recent article titled Pa. Loses Out on Medicaid Bonus.

The piece laments Pennsylvania’s failure to get a $2 million “bonus” via federal taxpayers if we had, get this, increased state Medicaid rolls. That’s right, the federal government is rewarding states for placing more people on low-quality health insurance. Dumping more individuals into the broken Medicaid system is the last thing advocates of affordable and accessible health care should be promoting.

To get the bonus, states also had to meet criteria aimed at simplifying enrollment procedures for Medicaid and the Children’s Health Insurance Program, known as CHIP. These heavy-handed mandates ignore the unique needs of Pennsylvanians and are just one more reason we need to reject the Medicaid expansion and press for Medicaid flexibility.