Medicaid: Who Pays and Who Stays

Two important facts about a program on the brink of major transformation

Photo by Ian Hutchinson on Unsplash

Last night, the House of Representatives passed a major Medicaid cut that would force millions of Americans to lose their health insurance.

Many supporters of the bill believe that the federal government foots too much of the bill for enrollees who enjoy Medicaid benefits for too long.

Here’s Fox pundits making this argument yesterday:

BRIAN KILMEADE (CO-HOST): Right, and Medicaid got way too big because Barack Obama made Obamacare and all those states got the free money —

JACKIE DEANGELIS (FOX BUSINESS HOST): Correct.

KILMEADE: And now all of the sudden Medicaid doesn't look like it was supposed to and it is 95% financed by the federal government, it's supposed to be a state program.

DEANGELIS: Yes. And the longer we leave it that way, the more permanent that becomes.

KILMEADE: Right because people get addicted to the free money.

DEANGELIS: Correct.

Are they right? Who pays for Medicaid — and how long do people stay in the program?

Fact #1: The Feds Have Always Paid for More Than the States

Go all the way back to 1966 when Medicaid opened for business, and you’ll find that the federal government paid for the majority of the program — 56 percent, to be precise, compared to 44 percent paid by the states.

By 2008, at the end of the George W. Bush administration, the federal share of Medicaid rose to 59 percent.

While it’s true that it rose more after the Affordable Care Act (a.k.a. “Obamacare”), it’s nowhere near 95 percent. It varies by state, ranging from 59 percent in Wyoming to 83 percent in Mississippi and New Mexico:

Fact #2: Most People Are Enrolled in Medicaid for Less Than 1 Year

Most people are not “addicted” to Medicaid.

According to an analysis by the researchers Leighton Ku and Isabel Platt, the average enrollee only stays in the program for 9.8 months.

It’s a little higher for children, the aged, and the disabled, but even for those groups, the averages are less than a year. For all other adults — who presumably concern critics the most — it’s 9.8 months or less:

This is as true for adults who joined due to Obamacare (“expansion adults”) as it was for adults who qualified under the old rules.