Alyssia Finley explains the perverse consequences of Medicaid expansion‘s higher federal payments for single working-age adults in Medicaid expansion compared to traditional recipients like children in low-income families and people with disabilities.
What seems to have happened is this: Recall that for the pre-ObamaCare Medicaid populations—those disabled and sick folks—states must pay up to half the cost. In an era of tightening budgets, they appear to have set capitated payments lower than the actual cost of care. Then when it comes to the able-bodied people covered by the ObamaCare expansion, the feds cover nearly the whole tab, so the states are profligate.
In other words, Medicaid is now encouraging insurers to spend more money caring for people who don’t need it and less for those who do.
