Asset-rich Californians get to stick the bill for nursing home stays on other Americans
Robin Hood, that heroic figure of English folklore, purportedly stole from the wealthy to support the downtrodden of medieval society. While technically a scofflaw, his championship of the poor and moral clarity have endeared him to subsequent generations of children for centuries.
President Joe Biden and California Democrat Governor Gavin Newsom, through recent proposed and approved changes in California’s Medicaid program, are now about to perpetrate the opposite: taxing lower and middle-class U.S. taxpayers to fund the healthcare needs of wealthy Californians.
Given this administration’s propensity to do the same with other such initiatives, the recent action in California should not be surprising. Biden delivered student loan forgiveness for couples earning up to $250,000 per year, supplemental Covid-related ACA subsidies lasting through 2025 for families earning up to $400,000 per year, and $7,500 subsidies regardless of income for those purchasing electric vehicles that only the wealthy can afford. Yet, each of these contradicts the moral underpinning of Robin Hood’s intent.
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Over the past several months, we have observed headlines stating millions of Americans are about to lose Medicaid coverage as pandemic-era policies are rolled back. Many may indeed lose Medicaid — but the majority of these as reported by some of the nation’s leading health insurers are already offered coverage through their employers or can enroll in heavily subsidized ACA marketplace plans.
California Gov. Gavin Newsom is teaming up with President Joe Biden to stick it to middle-class taxpayers so wealthy residents benefit. (AP Photo/Rich Pedroncelli)
Despite these readily available alternatives, California requested, and has now been authorized by the Centers for Medicare and Medicaid Services, to dissolve Medicaid’s eligibility and asset verification requirements — effectively expanding the program to include even those who are well-off financially. Silicon Valley billionaires, rejoice!
With at least 50% of California’s Medicaid Program (known as Medi-Cal) funded by the federal government through the Federal Medical Assistance Program, dissolving this significant eligibility criterion for Medi-Cal beneficiaries permits asset-rich Californians to stick the bill for their nursing home stays to taxpayers across the United States. Moreover, its approval will now surely set a precedent for other Medicaid jurisdictions to follow suit.
The Social Security Act of 1940 has mandated that Medicaid’s eligibility guidelines include verification of assets, income and employment status. But, amid the chaos of the COVID-19 pandemic, emergency measures were enacted, and Medicaid enrollment growth was facilitated without the usual verification of eligibility.
This approach was designed to provide immediate relief during a crisis, but, by law — according to the Families First Coronavirus Response Act — was only a temporary measure.
Medicaid’s suspension of eligibility determination protocols such as asset verification was similar to the SBA’s fraud-riddled Paycheck Protection Program — pay first, verify later. And while millions of people kept their jobs and healthcare, it was at a cost of hundreds of billions of taxpayer dollars lost to fraud, waste and abuse.
For instance, the Louisiana Department of Health spent $112 million on Medicaid coverage for nearly 14,000 adults who don't appear to live in Louisiana, according to a state legislative audit. Simply "verifying" someone’s address would have solved that problem.
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Now that the pandemic has subsided and the public health emergency has ended, Medicaid is legally required to verify eligibility again. Nonetheless, Centers for Medicare & Medicaid Services, in violation of the Social Security Act of 1940, recently approved California’s request for an amendment allowing it to waive the "asset verification" requirement for Medi-Cal recipients.
American taxpayers are now required to cover 50% of the costs, amounting to thousands of dollars per affluent Californian annually, for a government welfare program originally designed to assist the indigent.
Despite these readily available alternatives, California requested, and has now been authorized by the Centers for Medicare and Medicaid Services, to dissolve Medicaid’s eligibility and asset verification requirements — effectively expanding the program to include even those who are well-off financially. Silicon Valley billionaires, rejoice!
There's no rational justification for this. Any person living at or below 150% of the poverty line is already eligible for Medicaid. This policy shift — the eradication of asset verification requirements — only benefits those who are relatively wealthy. The fact that this has been pushed through without a peep from those on the left or the right speaks volumes and signifies a new level of backdoor maneuvering.
This is simply one more glaring example of Federal Government overreach. This unlegislated, stroke-of-the-pen policy change raises moral, ethical and even Constitutional concerns. Can one state, in concert with the executive branch, violate the law, circumvent Congress, and force the rest of the country to pay for it?
California surely has a right to run up its deficits by spending $1 trillion a year, or even $10 trillion for that matter, on providing free healthcare to its residents — but it should never be permitted to do so using the hard-earned money taken from the middle-class taxpayers of other states; particularly if it is used to benefit the wealthy.
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Paul Mango was the Deputy Chief of Staff for Policy at the U.S. Department of Health and Human Services from 2019-2021, serving as Secretary Alex Azar’s formal liaison to Operation Warp Speed where he was involved in nearly all strategic, operational, and financial aspects of the program, and facilitated its day-to-day activities among the Department of Health and Human Services, Department of Defense, and the White House. His forthcoming book is "Warp Speed: Inside the Operation That Beat COVID, the Critics, and the Odds" (Republic Book Publishers, March 15, 2022).
