Yes, we have to cut Medicaid its grown out of control

Democrats are attacking the House Republican budget, saying that the $1.2 trillion of savings it calls for will “gut” social services.In particular, they call out the proposal to save $880 billion over 10 years from Medicaid.But these savings reforms need not “gut” Medicaid, In fact, well-designed reforms may finally restore some fiscal common sense to the health-care program.Republicans should own this proposal, and confidently assert that Medicaid’s waste, fraud, and poor accounting practices absolutely provide room for savings without harming the most vulnerable.After all, since 2013, the number of Americans living in poverty has fallen by by 10 million.

Yet during that time Medicaid’s monthly enrollment has leaped from 54 million to 79 million, and its inflation-adjusted federal cost has nearly doubled from $351 billion to $643 billion.Opportunities for savings certainly exist.An easy place to save up to $160 billion over the decade would be repealing a Biden administration rule that limited how often states may verify the eligibility of their Medicaid recipients.Essentially this rule forced states and the federal government to continue providing benefits to families whose income has risen high enough to graduate out of this anti-poverty program.

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Never miss a story.Limiting benefits only to those deemed legally eligible should be an easy call.Medicaid could also save up to $720 billion over the decade by curtailing, or even banning, a practice known as the Medicaid provider tax gimmick (MPTG).States set up their own Medicaid programs and then the federal government reimburses state governments for between 50% (for high-income states) and 83% (for low-income states) of those costs.

The MPTG is an accounting trick by which...