Biden’s Self-Congratulation Can’t Cover up Obamacare’s Failings

The Biden administration is patting itself on the back for a supposed milestone in American health care. According to a new report from the Department of Health and Human Services, “31 million Americans have health coverage through the Affordable Care Act — a record.”

But a closer look at the report reveals that the administration has little to gloat about.

About 60% of those 31 million Americans are enrolled in Medicaid. So, the Biden administration is bragging about pouring record numbers of Americans into one of the most ineffective, expensive, and dysfunctional health insurance schemes our nation has to offer.

Obamacare expanded Medicaid coverage to all adults earning up to 138% of the federal poverty level — nearly $17,800 for an individual. To entice the states to participate, the federal government offered to cover 100% of the cost for expansion enrollees initially. It gradually ratcheted that share down to 90%.

A 2012 U.S. Supreme Court decision made Medicaid expansion optional for the states. Today, all but 12 states have elected to expand their programs. According to the HHS report, some 14.8 million people had enrolled through the expansion as of December 2020.

It’s unclear whether that’s any better than going without coverage. A landmark study of a pre-Obamacare expansion of Medicaid in Oregon compared patients that were randomly selected for the program with an uninsured control group. After two years, those enrolled in Medicaid posted “no significant improvements in measured physical health outcomes.”

Nearly 7.3 million uninsured Americans are eligible for Medicaid and yet haven’t bothered to sign up, according to estimates from the Kaiser Family Foundation. Clearly, they don’t see much value in the program — especially given that Medicaid coverage is effectively free to them.

So, while it’s true that more Americans rely on this entitlement than did before Obamacare, that fact is hardly worth celebrating.

Medicaid is imposing an ever-more onerous financial burden on taxpayers. As of 2018, the program was growing faster than overall state revenues and consuming nearly one-third of state budgets.

There’s another reason the Biden administration should think twice before trumpeting Obamacare’s Medicaid expansion as some sort of gift to American patients.

By bringing millions of able-bodied, working-age adults into Medicaid, Obamacare has transformed the program from an entitlement for the truly needy into the nation’s single largest provider of health insurance, covering over 72 million Americans. In so doing, it has undermined the quality of care available to genuinely underprivileged beneficiaries, including the poor and those with disabilities.

Recall that the federal government covers 90 percent of the cost of insuring enrollees in the expansion population. By contrast, the federal government covers between 50% and 84% of the cost for legacy beneficiaries — those the program was established for a half-century ago.

In other words, Obamacare’s Medicaid expansion gave states a financial incentive to prioritize signing up able-bodied adults over the destitute and those with disabilities.

It’s long been difficult for Medicaid beneficiaries to gain access to care. Healthcare providers are less likely to accept new Medicaid patients than new ones covered by Medicare or private insurance. Less than six in 10 general or family practice physicians see new Medicaid patients. By contrast, nine in 10 are willing to take new Medicare or privately insured patients.

The expansion of Medicaid only makes competition for scarce appointments even fiercer.

The Biden administration is desperate to depict Obamacare as a success. But the latest coverage figures from HHS tell a different story — one where more Americans depend on a broken government entitlement and the least well-off patients face additional barriers to care.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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