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Elias Tsapelas

Since the beginning of 2018, roughly 120,000 people have left Missouri’s Medicaid rolls. It now looks like many of them shouldn’t have been there to begin with. As I wrote nearly six months ago, this “surprising” drop has puzzled policymakers and health care advocates alike. The majority of those no longer receiving services are children, which has fueled further investigation by the state’s Medicaid agency. This past week, Missouri’s Medicaid director released a statement explaining the agency’s view of the enrollment decline and admitted the change was no surprise after all.

Missouri’s governor and other state officials attributed the decrease in enrollment to the state’s improving economy. It makes sense that an improving economy would reduce the need for government-funded health benefits, as more people are employed today than were a year and a half ago. But as Missouri’s enrollment is declining faster than the national average, and the state’s economic growth remains lackluster compared to the rest of the nation, it is unlikely the economy alone can fully explain the drop in enrollment. I think the following point from the Medicaid director’s statement highlights an important yet under-discussed driver of the enrollment change:

From 2014 to 2018, a previous administration did not robustly verify eligibility requirements of individuals on an annual basis and therefore automatically renewed a significant number of enrollees, many of whom did not qualify for assistance . . .

In other words, the drop in Missouri’s Medicaid enrollment is not surprising because the program has been providing health coverage to individuals who did not meet eligibility requirements. This is a shocking admission from our state’s government, considering the federal government requires states to annually verify each participant’s Medicaid eligibility.

The extent of the wasteful spending remains unclear, but the fact it occurred is sadly unsurprising. A recent audit of the Medicaid program in Louisiana found that 82% of enrollees were ineligible at some point during the year they were enrolled. My colleagues and I have written about the state’s potential for wasteful Medicaid spending, and this report confirms our worst suspicions.

As Medicaid costs consume more and more of our state’s budget, limiting improper spending on ineligible individuals is essential. Policymakers should consider a new investigation into how much taxpayer money was wasted while wrongfully propping up the program’s enrollment in the first place.

 

About the Author

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Elias Tsapelas
Analyst

Elias Tsapelas earned his Master of Arts in Economics from the University of Missouri in 2016. His research interests include economic development, health policy, and budget-related issues.