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More On Medicaid Expansion

Had a good time on KMMS this morning talking about Medicaid expansion so I thought I’d jot down a few notes from the show.

If you’re on MPI’s website you’re already active and aware on policy issues so I won’t belabor the point with a lot of background, but in a nutshell the Governor is about to roll out his plan to expand Medicaid as our masters in Washington have directed to include people earning up to 138% of the federal poverty level. That’s a bad idea for several reasons, as I argued in an Op Ed back in January. We’ll have a lot more on this soon, but here’s a quick outline:

  1. It’s bad welfare policy: According to an Urban Institute study that pretty much everyone is using, 43% of those added to Medicaid in MT would be under 35 years old and 75% would be childless. Unless they’re disabled, putting young, unfettered individuals on public assistance without some kind of work or payment in kind system is unfair to taxpayers, creates all the wrong incentives, and traps them in an entitlement web that’s tough to get out of.
  2. Will cost taxpayers more than just the expansion: Hospitals claim it will save taxpayers and those who are privately insured money because putting more people on Medicaid will reduce their unreimbursed or charity care costs. Don’t believe it. In states like Maine where they’ve already been down this road, those costs increased as people moved from private insurance to Medicaid and uninsured numbers remained virtually unchanged. Just think about it: how will adding 50,000 people from an at-risk population (lower incomes equate to poorer health) to a program with low and sinking reimbursement rates save money?
  3. Job numbers are probably overstated: We need to do a little more homework on this – and will – but claims of more jobs from “free” federal money have been wildly overstated in the past and probably are now as well. And besides, as argued in a New England Journal of Medicine paper called “The Health Care Jobs Fallacy,” if the same health care outcomes can be achieved with fewer resources that leaves more for schools, transportation, safety, and other public priorities.
  4. And finally, it ain’t free money: Over 30% of the “free” money will be borrowed by the federal government, and the remaining will either paid for by you on April 15th or come out of other spending priorities. Direct costs to Montana taxpayers of expansion range from $50 million to around $150 million depending on whom you believe, and there are few examples of entitlement program cost estimates being understated. President Obama’s last two budget submissions included increasing the states’ share of Medicaid reimbursements, so talk of 100% federal cost share is doubtful in the future, and so-called circuit breakers that would cancel expansion if the feds renege are meaningless. Nobody is going to take away this benefit once it’s been granted, so let’s wait a couple of years, see how they like it in other states, and then make an informed decision.

Enough Already! – And here who who will run your health care…

http://www.bloomberg.com/news/print/2010-07-22/obama-to-sign-law-limiting-110-billion-in-erroneous-government-payments.html