In 2019, I attended my first meeting of the Society for Benefit-Cost Analysis in Washington, D.C. The keynote speaker was Cass Sunstein, one of the most prominent public advocates for the use of benefit-cost analysis and former administrator for the Office of Information and Regulatory Affairs under President Obama.
His keynote was on a phenomenon he called “sludge.” This was the phenomenon of how much time costs are exacted by the government on individuals through paperwork.
His idea was that time that people spent on filling out government paperwork is time they could be spending working, resting, with their families, or any of the other ways people spend their time. Therefore, we should consider the time people spend on regulatory compliance as a cost to society.
As policymakers at the federal level passed the “Big Beautiful Bill,” they ushered in a new moment in the history of sludge: the moment sludge was used to try to discourage people from getting health insurance.
According to the Kaiser Family Foundation, the Big Beautiful Bill creates new requirements for verifying addresses, cross-checking eligibility and data against other sources, and reduces retroactive coverage from three months to one month. It also imposes work requirements, puts penalties in place for covering immigrants, and makes renewing Medicaid more time-consuming and onerous.
The goal of these changes is to reduce enrollment in Medicaid.
In Ohio, the Center for Community Solutions said in an analysis that enrollment loss could be as high as 450,000 people.
The federal government is not alone in working to create sludge in the Medicaid program. For years, policymakers have been working to exact work requirements on Medicaid recipients.
The problem with this approach is that work requirements don’t work.
When work requirements for Medicaid enrollment were put in place in Arkansas during the first Trump Administration, most of the people who lost their health insurance were people who were working but did not know how to comply with the new requirements for reporting that had been put in place.
When policymakers at the federal level were working to reform the welfare state, they reduced spending by turning entitlement programs into block grant programs, allocating only a certain amount of money to each state and requiring them to manage that money.
While many would argue this was not good policy (it certainly turned America’s most important cash assistance program into a shell of itself), it was at least not so cynical of a policy as to throw sand into the cogs of the state then complain about it not working.
Part of the reason for the different strategy is because Medicaid is popular. Of the 50 states, 40 have adopted Medicaid expansion. A majority of the states that have adopted Medicaid expansion voted for Trump in 2024.
Out-and-out cutting Medicaid would be unpopular among the constituents of legislators. So instead, they turned to rules that seem reasonable on their face — like eligibility verification and work requirements — that in reality just make the system more complicated and push people off health insurance.
Policymaking predicated on deceiving the public is cynical.
Creating red tape on programs you don’t like removes any moral high ground you have to complain about government inefficiency.
If you don’t believe in government working, I don’t really know why you want to spend your career working in it.
This commentary first appeared in the Ohio Capital Journal.