The latest front in the Biden administration’s crusade to bypass the congressional appropriation process and expand the welfare state comes in the form of the medicalization of everyday life through Medicaid coverage of “health-related social needs.”
The Centers for Medicare and Medicaid Services recently approved three Section 1115 demonstration initiatives that allow Oregon, Massachusetts and Arizona to use Medicaid funds to pay for non-medical expenses such as housing benefits (rent, moving, furniture), meals, air conditioning and air purifiers pay. during climatic emergencies” and transportation services.
CMS Administrator Chiquita Brooks-LaSure argues that such measures are necessary “to address the social causes of health problems, such as lack of access to nutritious food and housing insecurity.”
This is an unnecessary and potentially huge expansion of Medicaid, the federally funded health care program for low-income families, children, and the disabled — and in Medicaid expansion states for low-income adults. Medicaid covers about one in four Americans. It is partially funded by the federal government (about two-thirds on average) and partially by the states. States have leeway in how they spend their portion, but strict rules limit how they can use the federal portion.
Prior to these recent approvals, adding non-medical services to the program could have been considered fraud, waste and abuse. However, Section 1115 exemptions allow state Medicaid programs to create demonstration projects that use federal Medicaid and Children’s Health Insurance Program funds in ways that federal regulations would not otherwise permit.
Of course, once Medicaid spending on housing and food can be used, there is no logical stopping point. Clothing, heating oil, gasoline, telephones, and computers could all be linked to the health and well-being of Medicaid recipients.
And since states bear only a third of the cost, on average, they have tremendous incentive to bring all kinds of goods and services, especially those previously provided only with state dollars, under the Medicaid umbrella. Expect a spate of waiver requests with an ever-growing list of health-related “social needs” that need to be met.
Section 1115 waivers are intended to be budget neutral, meaning that federal spending under the waiver may not exceed what it would have been without the waiver. However, as noted by the Government Accountability Office, CMS’s findings on budget neutrality are lax, “lack transparency” and often increase federal financial liability. And new, more flexible CMS policies allow purported savings from previous waiver cycles to offset federal spending on new waivers.
In fact, Medicaid has been on GAO’s “high-risk program list” since 2003, “in part due to concerns about inadequate tax oversight, including oversight of Section 1115 demonstrations.”
Team Biden doesn’t stop at Medicaid either. CMS’s Center for Medicare and Medicaid Innovation announced that it is developing Medicare Advantage models that address the social determinants of health by providing ancillary services such as non-medical transportation, meal delivery, and provide rental support.
It is also testing a health-related social needs screening tool for Medicare and Medicaid beneficiaries. The agency claims – without any sense of irony – that clinicians can “easily” use the eight-page, 26-question tool as part of their busy clinical workflows with people of different ages, backgrounds and backgrounds to “educate patients.” ‘ Establish treatment plans and refer them to community services.”
The broadening of the definition of government-funded health care is consistent with other moves by the administration to expand the welfare state. It has repeatedly extended the public health emergency — an emergency President Joe Biden has acknowledged is over — which bans states from removing an estimated 16 million ineligible beneficiaries from Medicaid lists. Now these beneficiaries can also look forward to non-medical benefits.
Taxpayers should ask their elected officials why Medicaid pays for housing, food, air conditioning, and other non-medical services. Other public welfare programs with large federal funding streams are already addressing these areas, and most Medicaid recipients are already receiving benefits from these programs.
And Congress should be asking why the government is unilaterally undermining a medical welfare program to cover non-medical services that Congress has already funded. Extending Medicaid to health-related social needs is bad policy, and it is one that should be passed by Congress, not executive branch bureaucrats.
Joel Zinberg is a Senior Fellow at the Competitive Enterprise Institute and Director of the Paragon Health Institute’s Public Health and American Well-Being Initiative. Gary Alexander is director of Paragon’s Medicaid and Health Safety Net Reform Initiative.