Policy Documents

Medicaid's Perverse Incentives

James Frogue –
July 1, 2004

This article from ALEC by James Frogue points out that state medicaid programs are in trouble because spending is increasing and the states are having difficulty keeping up with the increases.  Political leaders have little understanding of what is wrong with Medicaid, much less how to fix it.  The problem with medicaid is that it has perverse incentives--there are financial rewards for ineffciency in the system.  Frogue explains what Medicaid is and then offers ideas to reform the system.