Politicians have perfected the craft of campaigning on fiscal responsibility, only to govern as if taxpayer dollars grow on trees. Nowhere is the failure of elected officials to rein in public spending more glaring than in Medicaid, which is ballooning into an unaccountable $1 trillion-a-year entitlement. However, common sense reforms enacted in President Trump’s Working Families Tax Cuts finally put an end to budget gimmicks that states have used to inflate federal spending for decades.
Originally designed as a partnership between the federal government and the states, Medicaid has devolved into a financial shell game. States figured out they can game the system by taxing health care providers, and then immediately recycle those funds back to the same providers to artificially inflate their reported Medicaid expenditures. This increased spending on paper, in turn, allows state governments to bilk federal tax dollars by triggering higher Medicaid matching funds without making meaningful contributions of their own.
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