NCPA - National Center for Policy Analysis

A Simple Way States Can Cut Their Medicaid Rolls

November 24, 2014

There's a simple way to reduce Medicaid spending, says Merrill Matthews, resident scholar with the Institute for Policy Innovation. Just by reevaluating who was on their state's welfare rolls, Illinois and Pennsylvania were able to remove hundreds of thousands of people from their Medicaid programs, saving taxpayers a great deal of money.

Illinois had a Medicaid funding shortfall of $2.7 billion in 2013, and it was struggling to keep its program funded. So, lawmakers passed the SMART Act, which created a "redetermination" program -- a program that would reevaluate whether the people on the state's Medicaid rolls were still eligible. Matthews explains that after examining 1.3 million Medicaid case files covering 2.7 million people, the state removed 234,000 people from its Medicaid rolls in February 2014. Since then, the state has continued its redetermination program, having removed 173,469 people from the program between February and September. There were 8,000 dead people on the state's rolls, in addition to people who no longer qualified for the program for various reasons.

Pennsylvania embarked upon a similar initiative to tackle Medicaid and other welfare programs. After a year and a half, the state had removed 220,000 people from its welfare programs, resulting in a savings of $710 million.

Cleaning up Medicaid rolls is especially important today, as the program is growing rapidly, with enrollment having increased 15 percent since October 2013. Matthews explains that states that expanded their Medicaid programs are seeing even higher growth, and 10 states have seen growth of 30 percent.

Source: Merrill Matthews, "How Two States Cut Medicaid and Saved Money," Institute for Policy Innovation, November 17, 2014. 


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