The “one big beautiful bill” is poised to clean up a financing scheme that lets states abuse the Medicaid program for extra money.
Forty-nine states use so-called healthcare provider taxes to siphon money from the federal Treasury, supposedly to fund health coverage for the poor.
State governments tax providers—mainly hospitals—but return much of the money right back to the hospitals, labeling it a “supplemental payment.” Under this label, the returning money triggers a federal matching payment.
The federal matching funds have financed both Medicaid’s explosive growth and state spending unrelated to the program. Connecticut used federal funds from provider taxes to close its enormous state budget deficit in 2017. The state continues to rely heavily on the gimmick.
Read the full column in The Wall Street Journal
Red Jahncke is a nationally recognized columnist, who writes about politics and policy. His columns appear in numerous national publications, such as The Wall Street Journal, Bloomberg, USA Today, The Hill, Issues & Insights and National Review as well as many Connecticut newspapers.