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A new AHA blog pushes back on some new reports that “have displayed a gross misunderstanding of both the legitimacy of various Medicaid financing arrangements and the consequences of stripping those resources from states trying to provide health care access to their most vulnerable residents.” 

For example, a recent from the Paragon Health Institute, “Addressing Medicaid Money Laundering: The Lack of Integrity with Medicaid Financing and the Need for Reform,” recycles “misguided opinions,” the AHA said. 

“Medicaid is not a money laundering scheme,” the AHA blog states. “Medicaid is a complex program that takes into account state and federal priorities to provide coverage for children, older adults, people with disabilities, and low-income adults. Let’s be clear: Any suggestion that provider taxes are anything but longstanding, legally vetted, state and federally approved tax arrangements, is dishonest and a distraction from what these proposals truly are — a way to cut the Medicaid program.” 

As policymakers debate cutting Medicaid as part of efforts to extend the 2017 tax cuts, the AHA said nearly every state Medicaid program would be hurt by lowering the limit on provider taxes, and state residents would be put in the crosshairs of these cuts. “States with strained budgets will need to shore up funding from elsewhere, either by raising taxes on their residents or cutting health care coverage and benefits for some of our most vulnerable people. For many states, a budget gap of this magnitude simply could not be backfilled through other funding sources.”