House Republicans Just Touched the Third Rail

The main vehicle for the House GOP’s Medicaid cuts is to require Medicaid recipients to get a job. That’s pretty ironic, because the program, as it was first implemented in 1966, required Medicaid recipients to be unemployed. Enrollment was almost entirely limited to people receiving Aid to Families With Dependent Children, the pre-1986 cash welfare program for jobless mothers. The federal program’s cost-sharing with the states further limited enrollment because many states didn’t want to pay up. As late as the mid-1970s, Medicaid still excluded about 40 percent of the nation’s poor, and enrollees struggled to find a doctor willing to accept Medicaid patients. That was fine by conservatives, who, according to Laura Katz Olson, a political scientist at Lehigh University, writing in her 2010 book The Politics of Medicaid, “were assuming that the program’s scope would be kept in check by its clients’ lowly status.”

That calculus was wrong from the beginning because, unlike cash welfare, Medicaid distributed funds directly to nursing homes, hospitals, and physicians, all constituencies with political clout. From the start, Medicaid also provided nursing home care to middle-class elderly people who spent down their savings to qualify for subsidies. States warmed to the program as they figured out clever accounting tricks to shift more program costs to the federal government.

Liberal members of Congress—most notably Representative Henry Waxman, a California Democrat—quietly extended Medicaid eligibility year after year. Waxman was aided, the Rutgers political scientist Frank J. Thompson writes in his 2012 book Medicaid Politics, by “keen negotiating skills and an understanding of how to take advantage of budgetary rules,” which through the 1980s did not oblige Waxman to show how much these expansions would cost. Colleen Grogan, a University of Chicago political scientist, calls this strategy “Grow and Hide.”