Obamacare’s Latest Failure: Medicaid Expansion – Pacific Research Institute

Obamacare’s Latest Failure: Medicaid Expansion

Obamacare’s defenders have one less leg to stand on, thanks to a new report on the health law’s attempts to reform Medicaid.

Obamacare increased the number of people eligible for Medicaid — the healthcare entitlement for low-income Americans — by allowing individuals with annual income at or below 138 percent of the federal poverty level, or $11,880 in 2016, to sign up for Medicaid.

The Congressional Budget Office estimated that, in 2016, 11 million newly-eligible Medicaid beneficiaries would be covered by the program. In the eyes of Obamacare’s supporters, this coverage expansion was a major victory for the health law.

But a new study co-written by Jonathan Gruber, one of Obamacare’s chief architects, paints a far less flattering picture.

According to that report, the largest percentage of people who gained insurance under Obamacare in 2014 were eligible for Medicaid even before the law took effect. These individuals simply failed to “come out of the woodwork” until after Obamacare was enacted.

Gruber’s report found that this “woodwork effect” accounted for 44 percent of all newly-insured Americans in 2014, a plurality of people who gained coverage that year.

Meanwhile, only 3.3 million Americans, a meager 19 percent of individuals who signed up for Medicaid in 2014, enrolled because Obamacare made them newly eligible.

In other words, the biggest share of Americans who gained insurance in Obamacare’s first year could have gotten the same coverage with or without Obamacare. That this damning revelation comes from one of Obamacare’s chief designers only underscores how indefensible the law has become.

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.

Scroll to Top