The spending cuts included in the bill House Republicans passed in late April to raise the debt ceiling have Democrats up in arms. But federal spending has soared. It's now 5 percentage points higher as a share of GDP than the average since 1960.
As House Speaker Kevin McCarthy quipped this week, "Is it too much to ask that we spend what we spent just five months ago?"
One of Republicans' best ideas is to require able-bodied Medicaid enrollees to work, train for a job, or engage in community service in return for coverage through the program, which is jointly funded by the federal government and the states. These work requirements could nudge people off government dependency and into self-sufficiency — and save taxpayers money in the process.
The proposal goes out of its way to exempt individuals who face significant barriers to work. This includes disabled people and anyone with children or other dependents.
The remaining enrollees aged 19 to 55 — whom we might reasonably call "working-age Americans" — would be required to engage in 80 hours of work, job training, or community service each month.
Is it too much to ask for 20 hours of productive labor per week in exchange for taxpayer-financed health coverage?
The case for Medicaid work requirements only gets stronger after considering the program's crippling costs. According to the most recent federal data, Medicaid spending in 2021 was $734 billion. That amounts to 17% of the nation's health spending.
Even more troubling is the startling rate of spending growth. If current trends continue, Medicaid's costs will exceed $1 trillion in just five years.
This growth will be especially difficult for states, which covered just under a third of all Medicaid spending in 2021. They can't run budget deficits. So, cost growth in Medicaid will crowd out other vital state spending priorities, including education and infrastructure.
Medicaid enrollment has ballooned because Obamacare redefined the purpose of the program. Historically, it's been a safety-net program for the destitute, pregnant women, the disabled, and those unable to care for themselves. Obamacare opened Medicaid up to everyone making up to 138% of the federal poverty level.
In so doing, it created a perverse incentive for individuals to drop out of the labor force, or deliberately earn less, in order to meet the eligibility requirements for the program.
Even before COVID temporarily wrecked the labor market, able-bodied people were flooding onto Medicaid. In 2019, there were 34 million able-bodied adult Medicaid enrollees.
Today, there are more than 93 million people covered by Medicaid and the Children's Health Insurance Program. That's up from 56.5 million people pre-Obamacare.
The labor force participation rate, meanwhile, still hasn't returned to pre-pandemic levels.
It's hard not to look at these data and conclude that easy access to Medicaid for able-bodied Americans has enticed millions of workers into government dependence, sapping our economy of dynamism in the process. Work requirements address that problem head-on.
It's encouraging, then, that House Republicans have included the provision in their debt-ceiling bill. And it's heartening that the Biden administration appears to have finally admitted they'll have to engage with the House's ideas if they want to raise the debt ceiling. Elections like last fall's have consequences, and this is one.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is "False Premise, False Promise: The Disastrous Reality of Medicare for All," (Encounter Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.
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