Team Biden’s Latest Welfare Expansion: Medicaid Payments for Housing, Food, even Furniture

Co-authored by Dr. Joel Zinberg and Gary Alexander

The latest front in the Biden administration’s crusade to bypass the congressional appropriations 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 nonmedical expenses such as housing supports (rent, relocation expenses, furniture), meals, air conditioning and air purifiers “during climate emergencies” and transportation services.

CMS Administrator Chiquita Brooks-LaSure argues such measures are needed “to address the root social causes of health concerns, like lack of access to nutritious food and housing insecurity.”

This is an unnecessary and potentially enormous expansion of Medicaid, the government-funded health program for low-income families, children and the disabled — and, in Medicaid expansion states, low-income adults. Medicaid covers roughly one in four Americans. It is financed partly by the federal government (about two-thirds on average) and partly by the individual states. States have leeway in spending their portion, but strict rules limit how they can use the federal chunk.

Before these recent approvals, adding nonmedical services to the program could have been considered fraud, waste and abuse. But section 1115 waivers allow state Medicaid programs to create demonstration projects that use federal Medicaid and Children’s Health Insurance Program funds in ways federal rules would not otherwise permit.

Of course, once Medicaid spending can be used for housing and food, there’s no logical stopping point. Clothing, heating fuel, gasoline, phones and computers could all arguably be linked to Medicaid recipients’ health and well-being.

And since states pay on average only one-third of the cost, they have a tremendous incentive to include all kinds of good and services, particularly ones previously provided with state-only dollars, under the Medicaid umbrella. Expect a slew of waiver applications with an ever-expanding list of health-related “social needs” to cover.

Section 1115 waivers are supposed to be budget neutral, meaning federal spending under the waiver cannot exceed what it would have been without the waiver. But, as the Government Accountability Office has noted, CMS budget-neutrality determinations 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 for new waivers.

Read the full article at the New York Post.