The Medicaid bill, promoted by Republicans, proposes significant cuts to health insurance programs for low-income Americans. But US President Donald Trump argued that the law would change Medicaid in a way that combats “vain, fraud, abuse.”
“We’re not cutting anything meaningful,” the Republican president said. “The only things we’re cutting down are waste, fraud, abuse… We’re not changing Medicaid, we’re not changing Medicare, we’re not changing Social Security.”
The House passed the bill Thursday and is now moving to the Senate where it could be changed. The House version does not directly target Social Security or Medicare. But it changes Medicaid, including ways that align with Republican priorities.
The nonpartisan parliamentary budget office in Congress predicts that at least 8.6 million people will lose compensation due to the changes.
“We’ve seen a lot of trouble with our health policy research,” said Leighton Coo, director of George Washington University’s Center for Health Policy Research. “There are a few small provisions, such as looking for a registered death or a dead person to check addresses. But the main provisions are not fraud, waste, or error in any way. They reflect the policy preferences of Republican architects.”
Robin Ludwitz, vice president and director of the Medicaid program and uninsured with the Health Policy Research Group KFF, agreed that the scope of the bill’s changes would go further than Trump said. “The reduction in federal spending and the magnitude of the loss in coverage is far beyond eradicating fraud and abuse,” she said.
The main provisions of the bill may be removed before final votes and enactment, but other votes may be added.
The White House did not respond to this fact-check investigation.
How the federal government defines waste, fraud and abuse
The Centers for Medicare and Medicaid Services are the federal agency that operates Medicaid and provides official definitions of these three terms.
Fraud: “When someone intentionally deceives, conceals, or misrepresents money or property from a medical benefit program. Medicare or Medicaid fraud is considered a criminal act.” Waste: “Overuse services or other practices that directly or indirectly bring unnecessary costs to a medical benefit program. Examples of waste are conducting excessive office visits, prescribe more medications than necessary, and ordering excessive clinical testing.” Abuse: “When a healthcare provider or supplier carries out actions that directly or indirectly bring unnecessary costs to a medical benefit program. Abuse includes practices that do not provide medically necessary services to a patient or do not meet professionally recognized standards,” and oversupply or misuse of an invoice code.
Some bill provisions can be explained as targeting waste, fraud and abuse
One provision in the bill requires states to verify recipients’ Medicaid eligibility every six months, rather than annually under current law. The other sets stricter requirements for verifying subscriber addresses and other information.
Such efforts can save on spending on unqualified people and may be classified as waste reinvention measures.
Other regulations are more ideological than focusing on waste, fraud and abuse.
Some of the bill’s most well-known provisions are more driven by ideology. It’s the difference between how vast a program should be and what kind of people should benefit from.
One of these provisions involves people in the United States without documents.
The bill takes a different approach, as using federal Medicaid funds on undocumented people is already against the law. It seeks to make it difficult for states to rely solely on state funds to cover US immigration. Currently, 14 states and the District of Columbia cover children regardless of immigration situation, while seven states and Washington, DC cover adults living in the United States at least without documents.
In these states, the bill reduces the federal percentage of Medicaid payments from 90% to 80%.
In other words, if states want to continue covering undocumented people, they will face reduced federal repayment rates for compensation for US citizens, as well as immigrants in undocumented countries. These state budgetary pressures could mean that some citizens will also lose some of their benefits or all Medicaid compensation.
Another provision includes work requirements. The bill requires individuals aged 19-64 to receive Medicaid based on the expansion of the Affordable Care Act passed during former President Barack Obama’s Democratic administration.
Research shows that the majority of people who need to work under similar requirements are already employed or eligible exemptions, but many have been thrown out of Medicaid because they can’t keep up with mandatory documents.
“The job requirements are not about waste, fraud or abuse. They fundamentally change the rules for those eligible for the program, adding bureaucratic obstacles and red tape to ensure that eligible people maintain coverage.”
A KFF analysis in March found that fraud occurred mainly in Medicare and Medicaid, by providers. “There are checks for fraud, waste and abuse at both the federal and state levels,” KFF wrote.
Another bill clause prohibits Medicaid funds spent on nonprofit organizations engaged primarily in family planning or reproductive services.
Finally, at least two provisions focus on saving money. For the first time, the state will require a $35 out-of-pocket for many types of care. The other limits retroactive coverage that has been reduced from the 90 days one month before the application after applying for Medicaid. These provisions do not specify how waste, fraud or abuse should be eradicated.
“The bill’s ‘Medicaid savings’ is primarily due to reducing program enrollment,” Sommers said.
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Trump said the House bill “has not changed Medicaid,” reducing “waste, fraud and abuse.”
The Act contains provisions that can improve detection of beneficiaries who are not eligible for compensation.
However, other regulations will change to match Medicaid with Trump’s ideology and Republican priorities. The bill would encourage the nation to halt the use of their own funds to cover undocumented people in the United States. It requires people to work to ensure profits or do other approved activities. It also prohibits Medicaid payments to nonprofit organizations such as Planned Parenthood, which provide abortions among other services.
Other changes aim to reduce costs, including copey levies and short windows for retrospective coverage. These provisions do not specify how waste, fraud or abuse should be reduced.
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