Medicaid expansion is a recipe for disaster

This November, voters in Utah, Idaho, Nebraska, and Montana will decide whether to expand Medicaid. Expansion would place huge burdens on taxpayers while offering minimal benefits to new Medicaid enrollees.

Last year, voters in Maine became the first to put Medicaid expansion on the ballot after Republican Gov. Paul LePage refused to expand the program under Obamacare. LePage has stopped Medicaid expansion seven times, but the state’s highest court ruled that he must comply with the referendum.

Obamacare allowed states, starting in 2010, to offer Medicaid benefits to able-bodied, childless adults earning up to 133 percent of the federal poverty level. The federal government enticed states to expand the program by promising to cover 100 percent of the expansion population’s costs from 2014 to 2016. That percentage will ultimately decline to 90 percent by 2020. So far, 33 states, plus the District of Columbia, have expanded.

Since Obamacare’s passage, Medicaid’s rolls have surged by nearly 28 percent. That’s harmful to taxpayers who shoulder the burden of the increased costs. Many states are considering work requirements to cut costs. A plan in Arkansas requiring able-bodied beneficiaries to work 80 hours a month went into effect in June. But a similar plan in Kentucky was recently overturned by a district court judge. The state expanded Medicaid under former Democratic Gov. Steve Beshear. Almost half a million people joined Kentucky’s Medicaid program — a roughly 50 percent increase in beneficiaries. Now, one in three Kentuckians rely on the service.

Current Republican Gov. Matt Bevin, who is term-limited out this year, has warned residents of the cost. Consequently, the expansion could soon prove too costly. By 2020, the state, which is already strapped for cash, will need to come up with nearly $300 million. Unsurprisingly, state officials are trying to partly roll back the expansion.

Other states are also scrambling to come up with extra funding. In Virginia, lawmakers imposed a fee on some hospitals to pay for the expansion. North Dakota cut reimbursements for care providers. Oregon raised taxes on hospitals and health insurance plans.

Ironically, the expansion has actually limited the most vulnerable Americans’ access to care. The program drastically underpays doctors, so many physicians can’t afford to take on Medicaid patients. Only 53 percent of physicians accept new Medicaid patients, according to a survey conducted by Merritt Hawkins in 15 large cities. In Denver, where Medicaid expansion did occur, a minuscule 20 percent of family physicians accept new Medicaid patients.

For all these reasons, voters in states with initiatives on their ballot should think twice before expanding a costly and ineffective program this November.

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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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