Question

What can be a more effective way of reducing the disincentive to work created by the Medicaid rule that benefits are proportionally reduced when a recipient finds work or increase in salary?

Group of answer choices

take away the medicaid benefits then tax the income from the new job a 20% tax until all the medicaid benefits are paid back

take away the medicaid benefits but reward the job acquisition by giving the recipient a tax credit

send them a congratulatory letter then take away their medicaid benefits in proportion to their wage

CMS can just collect the paychecks but continue to give Medicaid benefits

this does not create a disincentive to work

Answer 1

The mediciad rule is as we know is the way to provide the medical facility or security to the low income group workers. This is the benefit that is provided for poor or low income group to cover or insure them for their medical expenses.This service was provided to the workers as the medical costs are very high and the way the medical expenses are on rise, this facility provides them help in of any medical emergencies at same level and do not discrimiate the medical benefits on the basis of their income levels.This is a part of welfare economics to provide equal opportunities to all in the society.

The idea behind the Medicaid rule was to provide equal health care services to all irrespective of their income level.Its basically a called subset of poor.

Now if we talk about the more effective way of reducing the disincentive to work when the recipient of the benefit gets the job or his salary increases.

The above matter is of macro economics and every macro economic decision is taken by the government or authorities keeping the factors which will effect large number of population in positive manner.

There are several studies and factors which shows the variuos ways to implement the reduction but from the above given chioces if we choose the better one is :

"Send them a congratulatory letter then take away their medicaid benefits in proportion to their wages."

The above mentioned method is most justified if we gradually reduce the benefits and coverage of medicaid when the person get employed, get salary and his income levels crosses the threshhold levels of income decided by government.

When we are paid good the welfare economy burden reduces and the person become financially capable of taking care of his expenses.Every time there is a transition phase of every economic activity or any economic change it takes time to get best of the decision.

The government should frame out the rules and monitor the outcome of implementing the above rule and there may be further changes or modifications be done in the rule or plan like extending medicaid for few more months until he settles down in his job, providing mandatory aid to children below 6 years, senior citizen and differently abled members of the recipient family.

Every economic decision has its own merits and demerits and keeping regular checks in implementation and taking necessory actions whenever required is what expected from good governance.