House Bill Offers Medicaid Reforms, Would Remove Lotto Winners from Program

Published April 12, 2016

Taxpayers could save $30 billion if Congress approves a bill to make lottery jackpot winners ineligible for Medicaid, end enhanced Medicaid payments for prisoners, and eliminate an Affordable Care Act (ACA) fund once used to promote a sport called pickleball.

By a vote of 28–19, the U.S. House Energy and Commerce Committee (ECC) approved House Resolution 4725, the Common Sense Savings Act of 2016, on March 15. The bill now advances to the House floor.

Winners and Losers

HR 4725 would reduce the federal share of the State Children’s Health Insurance Program by sunsetting the ACA’s increase in enhanced Federal Medical Assistance Percentages in 2016, instead of 2019, according to the bill’s text. The bill would limit states’ ability to impose “provider taxes,” for which the federal government awards states additional funding, as a strategy to win more federal Medicaid dollars, according to an ECC press release.

Other proposed reforms include removing multimillion-dollar lottery winners from Medicaid rolls and reducing the federal Medicaid share for prisoners, some of whom receive more than disabled children and pregnant mothers, the release says.

Slush Fund Neutered

The Common Sense Savings Act would eliminate the ACA’s Prevention and Public Health Fund, which in the past has been used for urban gardening, pet neutering, pickleball promotion, and lobbying for higher taxes, ECC previously reported.

The fund can accurately be called a “slush fund,” says Peter Ferrara, senior fellow for entitlement and budget policy at The Heartland Institute, which publishes Health Care News. Ferrara is author of Power to the People: The New Road to Freedom and Prosperity for the Poor, Seniors, and Those Most in Need of the World’s Best Health Care.

“Calling it a slush fund is more than fair,” Ferrara said. “This just goes after the easiest targets. This is a desirable first step.”

Medicaid ‘Very Troubled’

Ferrara says Medicaid would better serve participants if Congress sent the federal share of the program to the states in the form of block grants.

“Medicaid is a very troubled program,” Ferrara said. “It doesn’t pay doctors and hospitals enough for the poor to get health care. Medicaid is an institutional means to deny poor people health care, or force them into emergency rooms, because so many doctors and hospitals won’t take Medicaid anymore.”

Giving states block grants to administer their Medicaid programs as they see fit would generate a variety of health insurance plans designed specifically to serve the poor and sick, Ferrara says.

“Block grant it back to the states, and then you will have competition among states in addition to the market competition to offer different types of health insurance,” Ferrara said. “Insurance companies will compete to specialize in offering health insurance for the poor and sick. That’s ideally where we want to go and use the marketplace competition to develop health insurance specifically designed for sick people.”

Quick Fix

The current bill would improve how Medicaid functions, but it shouldn’t be considered a long-term solution, Ferrara says.

“The bill would make modest improvements to Medicaid, but in the end, the country needs more than a quick fix, which is all this bill provides,” Ferrara said.

Health Subcommittee Chairman Joseph Pitts (R-PA), the bill’s author, says the legislation represents a chance for federal lawmakers to get the nation’s “fiscal house in order,” Pitts stated in a full committee press release on March 15.

“Federal spending on our health care entitlements is the largest driver of our debt and budget deficits, but we can act to avoid a crisis in the future,” Pitts said. “HR 4725 will make common-sense and practical changes to reduce our deficit by $30 billion over the next decade.”

Mary Petrides Tillotson ([email protected]) writes from Ann Arbor, Michigan.

Internet Info:

Peter Ferrara, Power to the People: Repealing and Replacing Obamacare with Patient Power, The Heartland Institute, December 1, 2014:

Bruce Edward Walker, “GAO: Half of All Medicaid Money Is Spent on Only 5 Percent of Enrollees,” Heartlander, The Heartland Institute, July 23, 2015:

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