Medicaid - The Social Welfare Piggy Bank

By ROGER STARK  | 
Nov 15, 2018
BLOG

Medicaid began in 1965 as a safety net health insurance entitlement for low-income families with children. It is funded by both state and federal taxpayers (even though these are the same people) with state control tightly regulated by the federal government.

Over the years, Medicaid has expanded dramatically to include long-term care, those with disabilities, low-income seniors who are also in Medicare, and now with the expansion under Obamacare, able-bodied people 18 to 64 years of age without children. No surprise, the cost of Medicaid has likewise increased dramatically from $1 billion in 1970 to $577 billion in 2017. (here) One out of every five Americans is now in Medicaid and the program is one of the top two budget items for every state.

Yesterday, Secretary Azar of The Department of Health and Human Services announced that hospitals may be able to pay for housing and food for low-income individuals using Medicaid dollars. (here) In other words, an entitlement that started as a health insurance safety net is now expanding to essentially include wealth redistribution.

From a public health standpoint, there is definitely a correlation between low-income and poorer medical outcomes. (here) From a practical standpoint, however, there is no evidence that giving people free stuff will alter their behavior and improve their health. If that were the case, everyone now living in public housing and everyone receiving food stamps would be healthier than other low-income people. There is no evidence to support this claim.

Again from a public health perspective, dietary concerns, that cut across all socio-economic classes is a much bigger problem in the U.S. Eighty percent of Americans are overweight and a third are obese. (here) It would be ludicrous to believe the government should regulate caloric intake. Voters have soundly rejected the soda tax as too much government interference in our lives.

No matter how hard they try, social engineers can not make everything and everyone equal. The government should not be responsible for wealth redistribution, but instead should do everything it can to insure everyone gets a first rate education. That is the key to allow individuals the opportunity to improve themselves and their position in society. Government officials should not expand Medicaid. Instead they should return the entitlement to a true safety net program to provide access to health care for the country’s most vulnerable people.

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