It's Past Time to Bid Good Riddance to Biden's Cause-Driven Medicaid Expansion
Earlier this month, the Trump administration rescinded the Biden-era guidance for states on how to get the federal government to pay for "health-related social needs" via Medicaid.
The guidance stretched the definition of "healthcare" to absurd lengths.
Are carpet replacement and tenant-rights education healthcare?
The Biden administration thought so.
Medicaid, the joint federal-state program signed into law by President Lyndon Johnson in 1965 under his Great Society domestic program, continues to fall short of its original mission — providing timely health coverage to low-income, disabled, and destitute Americans.
Using Medicaid funds to pay for things that no one can credibly consider healthcare only discriminates against those in need of actual health services.
The Biden-era guidance relied on the concept of "social determinants of health" to justify its loose approach to Medicaid spending.
It's fair to argue that non-medical factors — like housing, nutrition, air conditioning, and utilities — have an impact on someone's health.
Stretch that premise, and all of a sudden, Medicaid is paying for people to install air conditioning units in their homes.
It didn't take long for states to embrace this guidance — and ask the federal government for waivers that would allow them to game Medicaid's funding formula and unlock additional federal dollars.
The federal government is obligated to provide at least one dollar for every dollar a state devotes to Medicaid.
This means states are rewarded for spending as much as possible through the program.
Adding housing and nutrition to Medicaid's purview offered state governments a perfect chance to funnel federal matching funds into policy priorities only tangentially related to health care.
And as of this January, 21 states and the District of Columbia have pursued Section 1115 waivers for covering health-related social needs through Medicaid.
Medicaid currently spends north of $880 billion each year, and it already accounts for a large and growing share of state spending.
Enacting a reform that encourages states to spend more on the program — and commits the federal government to matching that spending — is beyond profligate.
But what makes the Biden-era guidance particularly wasteful is that there's little evidence showing that a focus on social determinants of health does much good.
According to the Manhattan Institute's Chris Pope, "[T]he bulk of SDOH research is substandard and does not appropriately disentangle causation from correlation."
Pope goes on to note that the most rigorous studies in the literature, which employ randomized-control trials, "typically find that SDOH expenditures have weak effects on health and few offsetting savings."
In other words, spending on housing, nutrition, and other nonmedical support is an incredibly inefficient way of improving health outcomes.
But it's a stellar strategy for making Medicaid more expensive — and attracting more federal money to savvy states.
It's also important to point out that, historically, Medicaid hasn't been all that successful at what should be its core function — improving the health of its beneficiaries.
When researchers compared a group in Oregon that gained Medicaid coverage with a similar group that did not, they found that Medicaid coverage had no statistically significant effect on physical health over a two-year period.
So, there's little reason to believe the program will be any better at effectively addressing housing, nutrition, or other public policy challenges.
The Trump administration has said it will now consider Medicaid waiver requests related to such social needs on a case-by-case basis, and "without reference to the . . . [Biden administration's] HRSN Framework."
Rolling back this policy won't end all the waste that plagues Medicaid. But it sends a message that the entitlement is, first and foremost, a coverage program for the needy — not an ATM for states and progressive causes.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It (Encounter 2025). Follow her on X @sallypipes. Read Sally Pipes' Reports — More Here.