The Conservative Argument Against Medicaid Is That It Has Grown

With no regard for what it does.

[This post is jointly written with Hannah Katch. It is a longer version of a letter to the editor that appeared in the WSJ yesterday. Thanks to Bob Greenstein for very helpful input.]

John Cogan, a senior fellow at Stanford University’s Hoover Institution, recently wrote a Wall Street Journal op-ed on Medicaid that’s as revealing as it is misleading. By failing to engage with decades of evidence about its impact, Cogan’s argument reduces to: Medicaid has grown, largely due to federal support for state programs, and therefore must be cut.

What he fails to consider is the possibility that Medicaid has grown for good reasons, and that both states and their residents are better off due to its expansion. Yet that is precisely what extensive evidence shows.

Medicaid has, in fact, expanded significantly over the past 60 years, and now provides health coverage to over 70 million children, parents, seniors, and people with disabilities. States value such coverage because without it, millions of their low-income residents would be uninsured and, when they get sick, would end up with uncompensated care whose costs fall on the states themselves and on hospitals and other health providers. Research has shown that without help from the feds, uncompensated care pushes up costs to paying patients, strains hospital resources, and pressures state-wide insurance premiums.

Cogan bemoans that federal support of Medicaid led to a large increase in coverage among the nonelderly population between 1989 and 2013, before the further ACA expansions. One significant source of this expansion was the 1988 introduction of the Children’s Health Insurance Program. According to important new work by policy analyst Robert Greenstein, CHIP, in combination with Medicaid and the Affordable Care Act, helped take the uninsured rate for children from 25% in 1988 to 4% in 2023.

Mr. Cogan simply assumes that Medicaid’s expanding coverage must be a bad thing, one that Congressional Republicans must reverse. His implicit assumption is that Medicaid is useless and states only go in on it because the feds help them pay for it.

The facts say otherwise. Careful research reveals important, lasting benefits of Medicaid coverage. A new study just published by the National Bureau of Economic Research followed nearly 40 million people who gained Medicaid through state-based expansions under the ACA between 2010 and 2022. It found that newly-eligible enrollees experienced a 21% reduction in their risk of death compared to similar people who couldn’t access Medicaid because their states failed to adopt the ACA’s Medicaid expansion. Overall, the authors estimate that Medicaid expansions saved about 27,400 lives between 2010 and 2022.

This landmark study builds on a strong foundation of prior evidence showing the same effects: a 2019 study found that Medicaid expansion saved the lives of at least 19,200 adults aged 55 to 64 over the four-year period from 2014 to 2017. Research has also shown that Medicaid expansions result in large increases in access to life-saving medications and in the share of adults getting regular checkups and preventive care, and large decreases in the number of adults skipping medications due to cost. And children with Medicaid coverage are more likely to have better health in the long-term than their peers, as well as being more likely to graduate from high school and attend college.

Cogan is also incorrect that Republican voters support Medicaid cuts. While Congressional Republicans have lined up behind their party leadership to vote for such cuts, their constituents are worried about the effect of these cuts, according to a poll fielded last month by the Kaiser Family Foundation. The poll, which sampled low-income adults, found that 62% of Republicans are either very or somewhat worried that the Medicaid cuts would lead to reduced coverage, 57% worry about the impact of the cuts on hospitals and nursing homes, and 53% worry about their family’s ability to pay for health care.

Another Cogan argument is equally misleading. He suggests that the history of the 1996 welfare-reform law should encourage Congressional Republicans to cut Medicaid deeply because it was “arguably the most successful reform of any entitlement program in U.S. history.” But the substance of welfare reform was nothing like what’s going on with Medicaid in the Republican’s budget bill. Before the welfare reform took effect, the Earned Income Tax Credit was significantly expanded. Shortly after the reform, the Child Tax Credit was created and expanded, as was Medicaid itself through the CHIP expansion noted above. As Greenstein’s sweeping study concludes, “Poverty rates...have fallen markedly over the past 50 years...the primary reason is that social programs have grown considerably stronger.”

It is true that welfare reform, in tandem with the expansions just noted and the full-employment labor market of the late 1990s, boosted work by former cash welfare recipients. But extensive nonpartisan research, including by CBO, shows this is not the case with Medicaid. Most adults with Medicaid coverage are already working (64% of enrollees ages 19-64), are caregivers (12%), are ill or disabled (10%), or are in school (6%). Most people with Medicaid are working in low-wage or seasonal jobs that are less likely to offer health insurance coverage, meaning they’d likely be uninsured if not for Medicaid. And having Medicaid coverage helps them keep their jobs or look for work – since people are more likely to be able to hold down a job if they are getting the care they need, getting their medications, and getting enough to eat. Conversely, policies that take coverage away from people who don’t meet a work requirement fail to increase employment, according to the nonpartisan Congressional Budget Office and others.

In 2021, child poverty fell sharply to an historic low of 5.2 percent. The cause was no mystery; it occurred due to a large, though unfortunately temporary, expansion of the Child Tax Credit. Our point here is that if you’re open to evidence, anti-poverty policies -- including Medicaid, EITC, CTC, and SNAP -- are highly effective at improving the living standards, opportunities, mobility, health, and, in the case of Medicaid, even lifespans of their beneficiaries. Cogan and too many other conservatives seem to think that simply by pointing out that more people are receiving these benefits, they have demonstrated the programs must be cut. But that only makes sense if you assume, against decades of careful evidence, that these measures don’t do anything useful.

If these critics took the time to examine these measures’ impacts, they’d learn that the programs provide essential support to millions of economically vulnerable Americans, who, without that support, will needlessly suffer.