Free Money: States Urged To Refuse Federal Payments That Discourages Work, Creates Expensive Medicaid


Almost every Republican governor declined to participate in the Biden administration’s unemployment benefit, which paid millions of individuals more than they earned working. This resulted in huge savings for taxpayers, the integrity of the unemployment system being protected, and, most importantly, individuals returning to work.

States can now take a similar step that will produce comparable results: they should refuse further federal “free money,” which discourages employment and leads to bloated, costly Medicaid rolls.

The federal government’s “free money” harms Medicaid

A new analysis from the Foundation for Government Accountability highlights the harm that DC’s Medicaid shackles are causing to states. The limitations were enacted by Congress in March 2020 as part of the Families First Coronavirus Response Act. The bill provided states with a 6.2 percent increase in federal Medicaid spending, but it came with conditions, as per NY Post.

Provisions that prevent states from adjusting qualifying rules or practices that might increase the program’s integrity are among the numerous limits. Worst of all, states are banned from removing ineligible persons from Medicaid for the first time in American history. The consequence has been predictable: a tremendous increase in Medicaid enrollment, fueled mostly by working-age individuals.

According to research from the nonpartisan state economist’s office, expanding Medicaid would stimulate the Mississippi economy substantially more than the far-reaching tax reduction suggested by House Speaker Philip Gunn.

Per Mississippi Today, extending Medicaid would generate more employment, increase the state’s population, and increase its wealth more than Gunn’s tax-cut proposal, which has passed the House and is currently awaiting in the Senate.

Major tax legislation is now being debated in the legislature. The House plan, championed by Gunn, would abolish the income tax, which provides for about one-third of general fund revenue, halve the cost of auto plates, and lower the grocery tax from 7% to 4% while raising the sales tax on other retail products from 7% to 8.5 percent.

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