EXCLUSIVE: Here’s How Medicaid Is Actually Impacting US Healthcare Affordability

Medicaid may greatly impact healthcare costs for American taxpayers, per a new Center for Healthcare Affordability report first obtained by the Daily Caller News Foundation.

CHA’s latest analysis asserts that eligibility errors and “weak oversight” across the Medicaid system can result in billions of dollars in additional healthcare spending in the United States.

“The healthcare debate too often focuses on who pays the bill instead of why the bill is so expensive in the first place,” CHA Executive Director Fred McGrath, who authored the report, told the DCNF. “At nearly $1 trillion a year, Medicaid is large enough that the incentives built into the program can influence utilization, provider capacity and healthcare costs across the entire system. Protecting Medicaid for those who truly need it and making healthcare more affordable are not competing goals. Done correctly, they reinforce one another.”

“Expanding the amount of money available to purchase healthcare does not automatically create another doctor, another nurse, another appointment or another hospital bed,” McGrath continued. “When [the] government subsidizes additional demand while regulation limits the ability of supply to respond, the result can be greater spending without solving the underlying affordability problem.”

The CHA’s report asserts that policymakers should ensure the Medicaid system has less “financing gimmicks” and more stringent “eligibility and payment controls” to help bring down healthcare costs.

“Medicaid can continue expanding as a broad financing vehicle, with taxpayers absorbing more utilization and increasingly complex payment arrangements,” according to the report. “Or policymakers can narrow its growth, strengthen eligibility and payment controls, reduce financing gimmicks, and pair those efforts with supply-side reforms that make healthcare less expensive outside the program.”

The report also claims that “the [key] question for 2027 is whether reform can reduce those cost pressures while making the program’s own spending more accurate and accountable.”

Additionally, the report notes that Medicaid “affects healthcare costs not only by changing who pays, but also by changing how much [medical] care is consumed.”

“Utilization responds to the price faced by the patient, and Medicaid generally reduces that price sharply at the point of service,” according to the CHA.