K-STREET, 10,000 FEET: Club for Growth Foundation plan to stop national "Medicaid-for-All system"

THE LOWDOWN:

• State-based expansion of Medicaid programs is wasting billions of dollars and is “quietly driving the nation toward a de facto Medicaid-for-All system,” the Club for Growth Foundation is warning in a new report, obtained exclusively by the Washington Reporter.

• At issue are the “seemingly endless Medicaid service extensions that often cater to niche provider markets and impose onerous coverage mandates that force higher provider taxes and reimbursement rates to maintain these new mandates.”

• The Club faults “state lawmakers in both parties” for “facilitating this hidden expansion with reckless abandon.”

• Congress’s One Big, Beautiful Bill (OBBB), which the Club supported, helps save Medicaid for future generations, according to its proponents. But expanding the program has three main concerns for the Club: new constituencies for Medicaid, new pressure to expand, and no limiting principle for expansion.

State-based expansion of Medicaid programs is wasting billions of dollars and is “quietly driving the nation toward a de facto Medicaid-for-All system,” the Club for Growth Foundation is warning in a new report, obtained exclusively by the Washington Reporter.

“While expansion states barrel ahead, many non-expansion states have opened the floodgates to costly service expansions without formally adopting Obamacare’s Medicaid expansion,” the Foundation explained.

At issue are the “seemingly endless Medicaid service extensions that often cater to niche provider markets and impose onerous coverage mandates that force higher provider taxes and reimbursement rates to maintain these new mandates.”

The Club faults “state lawmakers in both parties” for “facilitating this hidden expansion with reckless abandon.”

Without significant reforms, the Club warns that Medicaid “will explode the federal deficit and debt as it consumes state budgets under the illusion of ‘saving money’ through its gimmick-riddled [Federal Medical Assistance Percentage (FMAP)] scheme.”

Congress’s One Big, Beautiful Bill (OBBB), which the Club supported, helps save Medicaid for future generations, according to its proponents. But expanding the program has three main concerns for the Club: new constituencies for Medicaid, new pressure to expand, and no limiting principle for expansion.

“A clear-eyed evaluation of the non-expansion states shows that pressure for Medicaid expansion is moving in only one direction,” the report notes. “State lawmakers in both parties are greasing the skids for eventual Medicaid expansion to healthy adults by implementing incremental and continual service mission creep and reimbursement increases.”

"While much of the attention around Medicaid has been in Washington, legislatures in red and blue states across the country have been complicit in wasting billions of taxpayer dollars and ballooning welfare programs into a de facto Medicaid for all system,” the Club for Growth Foundation’s President, David McIntosh, told the Reporter. “Lawmakers must reverse course on this unsustainable approach to lower medical costs and ensure their constituents are positioned to succeed for generations to come. Thankfully, through its State Economic Scorecard series, the Club for Growth Foundation is exposing these previously hidden schemes and empowering Americans with a behind the scenes look at the policies impacting their livelihood.”

The Club is not against the existence of Medicaid, it makes clear. But it does want Congress to “restructure Medicaid to serve the truly needy, move healthy adults off the rolls, and disincentivize state expansions.”

Solutions to that end that it proposes include capping provider taxes in expansion states, eliminating provider taxes, strengthening work requirements, and implementing parity for FMAP.