TL/DR –
Medicaid’s mission is drifting from its original purpose of providing health coverage for low-income and disabled Americans, and has started funding additional benefits such as meal deliveries. Health insurers are even investing in the construction of affordable housing, with 19 states already approved to use Medicaid funds for temporary housing assistance. The author argues this shift is a mistake, believes Medicaid is already struggling to fulfill its healthcare mandate, and suggests that the program return to its original function.
Medicaid Straying from Core Purpose to Cover Additional Benefits
Medicaid, intended primarily to provide healthcare for low-income and disabled Americans, is increasingly covering additional benefits. The latest benefits now include meal deliveries and rental aids, under the pretext of factors that “influence health status”. Another potential add-on to the list is affordable housing, with health insurers investing in new residential construction.
Medicaid funds for temporary housing assistance have already been approved in 19 states. The plan is to use these funds to construct low-income housing, thereby increasing the chances to administer a state’s Medicaid plan. However, this move diverts the already strained Medicaid resources which should be focused on health care.
Citing an example, Centene, a leading Medicaid insurer, plans to invest about $900 million in affordable housing across eight states. Similarly, UnitedHealth Group has contributed over $1 billion towards affordable housing projects, creating over 25,000 homes for individuals and families facing housing insecurity.
Medicaid Funds Misused for Non-healthcare Purposes
It is essential to note that while companies have every right to invest as they please, taxpayers should not be burdened to fund their returns. Medicaid already has a history of paying for things it shouldn’t, and the state Medicaid programs enjoy broad discretion to cover additional benefits including social determinants of health.
In 2021, the Centers for Medicare and Medicaid Services published guidance urging state Medicaid programs to address such social determinants, which include social, environmental, and economic factors that can influence health status. This expanded interpretation has led to Medicaid funds being used for food, jobs, housing, and education.
The Financial Motive Behind Broadening Medicaid Scope
States have a financial incentive to broaden the scope of Medicaid to cover social determinants of health. For each dollar spent on the program, they receive at least one dollar from federal coffers. This system has led states to use Medicaid to fund additional projects to qualify for extra matching funds.
As of now, some states cover home-delivered meals or pantry stocking for up to six months through Medicaid. A few states fund gun violence prevention programs, while others have approval to pay for rent or temporary housing. These expansions have stretched Medicaid resources thin.
Need for Medicaid to Return to Core Function
While current guidelines do not allow Medicaid to build housing, there is speculation that this policy could change. This shift could lead to taxpayers footing the bill for new affordable housing units. However, with Medicaid expenditures already soaring, a return to its core function – providing healthcare for low-income and disabled Americans – is essential. Using Medicaid for grocery shopping or moving expenses dilutes its main objective and increases the financial burden on taxpayers.
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