Great news: Record number of Americans on public dole

For some, this will just prove how prescient Congress has been to create a vast network of social programs that combat poverty.  Others may wonder what the endgame looks like when one in six Americans now receive public subsidies through Medicaid, unemployment, or other welfare programs.  That ratio is a new record, according to USA Today:

Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.

More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That’s up at least 17% since the recession began in December 2007.

Think the Medicaid growth comes from the passage of ObamaCare in March?  Think again.  The expansion comes from the Great Recession and the loss of millions of jobs.  The ObamaCare expansion will come on top of the additions to the enrollments over the last two years, and that has major implications for health care providers and customers alike:

The program has grown even before the new health care law adds about 16 million people, beginning in 2014. That has strained doctors. “Private physicians are already indicating that they’re at their limit,” says Dan Hawkins of the National Association of Community Health Centers.

Some of those 16 million to be added may be part of the expanded enrollment now, of course.  However, even if the number left to be added is just half of the original 16 million estimate, it will drop like a bomb on provider networks.  Medicaid already pays below Medicare in reimbursements, for instance, and far below private-sector health insurance.  That’s why many providers won’t take Medicaid patients at all anymore, which pushes Medicaid patients into emergency rooms at a far higher pace than the uninsured.  We can expect to see even greater pressure on clinics and hospitals as a result.

But even outside of ObamaCare, the sudden growth calls into question the sustainability of the welfare state in the US.  Having one in six on some form of public subsistence perhaps underscores the real nature of unemployment and underemployment in the US, but voters have to also wonder at what point we can afford to keep going.  We already have entitlement programs like Social Security and Medicare about to sink into a sea of red ink because the worker-to-beneficiary ratio has dropped too low for the programs to remain on their current trajectories.  If every American has to support one-sixth of another outside of family through taxation, then either taxes will have to get hiked substantially or benefits and means tests have to be rethought.

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David Strom 5:21 PM on March 31, 2023