The Modern Medicaid Alliance submitted a statement for the record to the U.S. Senate Budget Committee in response to the hearing on August 4, 2026 titled “Medicaid: The Reality.” View the full letter below and linked here.
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Chairman Johnson, Ranking Member Merkley and members of the Committee,
The Modern Medicaid Alliance (MMA) appreciates the opportunity to submit this statement for the record regarding the Committee’s hearing, “Medicaid: The Reality.”
Medicaid plays a central role in ensuring that more than 73 million Americans can access affordable, dependable healthcare. The program has been a stabilizing foundation for many at their most vulnerable moments – including children, older adults, veterans, working families, people with disabilities and those with complex medical conditions. Medicaid also remains a cornerstone of the healthcare system nationwide and provides funding stability, particularly in rural communities.
The American people broadly support Medicaid as a vital investment in stronger communities and economic security. Strong majorities of Republicans, Democrats and Independents view Medicaid favorably. Recent polling found a decisive majority of voters (80%) have favorable views of the program, and 93% believe it’s important to have a strong, sustainable Medicaid program.1
Medicaid’s existing multilayered program integrity system is essential to maintaining a strong, sustainable healthcare infrastructure. States verify enrollee eligibility and screen providers; managed care organizations conduct utilization and payment reviews; and state and federal agencies audit for program and provider compliance, investigate suspected fraud and recover misspent funds. These efforts are producing results: in fiscal year 2024, state Medicaid Fraud Control Units secured 1,151 convictions and approximately $1.4 billion in recoveries. 2
Effective oversight, however, requires distinguishing intentional fraud from administrative errors, improper payments and lawful Medicaid financing mechanisms. If fraud prevention is the goal, policies that divert resources away from inspector general offices, audit capacity and state integrity staff — and increase administrative burden elsewhere — will undermine the very oversight apparatus that catches wrongdoing.
Provider taxes and Medicaid state directed payments (SDPs) should also be considered accurately. Nearly every state relies on provider taxes – implemented with full legal authority and federal oversight – to fund its Medicaid program. They support providers and fund essential healthcare services covered by Medicaid, including hospitals, long term care facilities, psychiatric care, pregnancy and postpartum services, as well as rural health. A provider tax that complies with federal law is a financing mechanism, not fraud.3
Similarly, recent reductions to SDPs threaten another important source of support for providers who care for Medicaid beneficiaries. SDPs have enabled states to strengthen provider networks and improve access to care. Reducing these payments could undermine providers’ financial stability. MMA has serious concerns that the changes made to these arrangements – on top of the forthcoming eligibility, coverage and redetermination changes – will harm access to care, not just for those who rely on Medicaid but for all Americans.
Medicaid is at a critical transition point as states prepare to implement more restrictive eligibility rules and further restrictions on critical financing programs. Policymakers should not invoke waste, fraud and abuse to justify additional funding reductions, coverage restrictions or administrative barriers. Instead, they should build on Medicaid’s existing infrastructure through better data sharing, modern detection tools and sustained support for state integrity staff, inspectors general and law enforcement. Congress should also direct the Centers for Medicare & Medicaid Services to pause implementation of recent Medicaid eligibility, coverage and financing changes until their effects on access to care can be more thoroughly evaluated. These safeguards would support effective state implementation and help ensure people who remain eligible for Medicaid do not lose coverage.
MMA and its member organizations believe deeply in Medicaid’s important role in the lives of American families and in the strength of the nation’s broader healthcare system. We remain committed to working with Congress to ensure Medicaid continues to fulfill that role.
The Modern Medicaid Alliance is a partnership between Americans who value Medicaid and more than 150 leading organizations representing patients, healthcare workers, children, older adults, people with disabilities, pregnant and postpartum women and health plans. We work to educate policymakers and the public about Medicaid’s value, innovation and accountability.
- Modern Medicaid Alliance, “Medicaid Program Integrity: Preventing and Addressing Waste, Fraud and Abuse,” June 8, 2026. ↩︎
- HHS Office of Inspector General, Medicaid Fraud Control Units Annual Report: Fiscal Year 2024. ↩︎
- Medicaid and CHIP Payment and Access Commission, Medicaid Financing, August 2025. ↩︎