New York’s home-care fraud scandal exposes Medicaid’s rotten incentives

Medicaid is federally funded and state-run, but the program’s beneficiaries often have the least say in who provides their care and what that care costs.

That’s a built-in flaw. States have every incentive to maximize federal matching funds while federal taxpayers bear much of the cost. The result pits state bureaucrats against Washington’s need to control Medicaid spending — and against taxpayers’ interest in stopping providers, insurers, and contractors from cashing in on weak oversight.

New York’s home-care scandal is not merely a contracting failure. It is a warning about Medicaid’s overall design.

That is why cosmetic Medicaid reforms so often produce more spending, more inefficiency, and more fraud.

Just look at New York.

Democrat Governor Kathy Hochul’s administration botched the reform of its roughly $11 billion Consumer Directed Personal