Paragon Health Institute Advances Medicaid Reform Research to Combat Fraud and Funding Imbalances

Paragon Health Institute has launched a new issue library on its website to provide policymakers and researchers with centralized access to key Medicaid research focused on reducing fraud and wasteful spending. The library features research papers such as Medicaid Financing Reform and Addressing Medicaid Money Laundering, highlighting systemic issues in Medicaid financing.

Originally, Medicaid financing was split between states and the federal government, with the federal government covering about 60% of costs for traditional enrollees like children and the elderly. However, under the Affordable Care Act (ACA), the federal government now covers 90% of Medicaid costs for able-bodied, working-age adults, shifting the financial burden and healthcare resource allocation.

This policy shift has incentivized states to prioritize care for able-bodied adults over more vulnerable populations. Additionally, some states have exploited open-ended federal reimbursement by engaging in legal money laundering schemes involving provider taxes and intergovernmental transfers. These practices transfer the financial responsibility from states to federal taxpayers while benefiting large healthcare providers.

California is identified as a major example, using Medicaid financing mechanisms to fund healthcare programs, including for unauthorized immigrants, drawing significant federal funds from taxpayers nationwide. Paragon's policy briefs and research have sparked discussion about these cost-shifting practices.

Polling conducted by Paragon shows strong public support for Medicaid reforms focused on equitable funding and protecting vulnerable populations. Paragon’s leadership emphasizes ending the preferential federal funding for able-bodied adults compared to other groups such as children and seniors.

The institute aims to realign Medicaid funding priorities to ensure program accountability, defend taxpayers, and improve healthcare access for the truly needy. Paragon Health Institute operates as a non-lobbying nonprofit organization providing independent, market-based policy research and proposals to influence Medicaid and healthcare policy.