States Can’t Afford Medicaid Expansion — Neither Can Patients

This fall’s midterm election ballot just got a little longer in Utah. In mid-April, progressive activists announced that they’d gathered enough signatures to force a November referendum on Medicaid expansion.

Utah isn’t the only red state flirting with extending free government health insurance to able-bodied, childless adults. Within weeks, activists in Idaho will surpass the number of signatures required for their own ballot referendum. Groups in Nebraska just launched a signature-gathering campaign, too.

If voters choose to expand Medicaid, they’ll surely regret it. Enlarging the program won’t improve the health of the poor. But it will strain state budgets — and take money away from other important public priorities, like education and infrastructure.

Congress originally established Medicaid to provide health coverage to low-income elderly, blind, and disabled people. The entitlement also covered pregnant women and mothers with young children.

Obamacare greatly expanded the program. The health law directed all states to offer Medicaid to residents earning up to 138 percent of the federal poverty level — or about $16,700 for an individual this year.

But in 2012, the Supreme Court ruled that mandatory expansion was unconstitutional. The ruling gave states the option to expand — or not — as they wished.

To date, 31 states and the District of Columbia have done so, sweeping more than 15 million new enrollees into the program. Today, Medicaid is the largest health insurance provider in the United States, with 74 million beneficiaries.

Last fall, Maine became the 32nd state to embrace expansion — and the first to do so via ballot referendum. However, Maine’s expansion hasn’t yet gone into effect. Gov. Paul LePage and the state legislature haven’t yet reached an agreement on where to find the money to fund the expansion.

Activists in Utah, Idaho, and Nebraska are trying to follow Maine’s lead, by putting expansion to the voters this fall.

Before they cast their ballots — and approve millions of dollars in new spending — residents of the three states ought to consider whether Medicaid actually improves the health of its beneficiaries. Surprisingly, research shows that it doesn’t.

Consider Oregon’s experience. In 2008, the state extended Medicaid coverage to 6,300 uninsured patients chosen at random through a state lottery. Researchers from Harvard, Columbia, and Massachusetts Institute of Technology compared health outcomes for these newly eligible beneficiaries to those for uninsured people who weren’t chosen in the lottery.

They concluded that the new enrollees displayed “no significant improvements in measured physical health outcomes in the first 2 years.”

Other research has shown that Medicaid patients fare worse than those who have no insurance coverage at all. Researchers at the University of Virginia looked at data from almost 900,000 operations between 2003 and 2007 and found that Medicaid patients were 13 percent more likely to die after surgery than uninsured patients.

The Medicaid expansion may even have helped to fuel America’s opioid epidemic by making it easier for people to obtain powerful painkillers, compliments of the government. According to a recent report from the Senate Homeland Security Committee, “Drug overdose deaths per one million people are rising nearly twice as fast in expansion states as non-expansion states.”

States pay an awful lot for such an ineffective, even harmful, program. In 2000, states devoted just over 19 percent of their budgets to Medicaid. By 2014, the program accounted for nearly 26 percent of state spending, on average. The share of spending on K-12 education, state universities, and public transportation fell accordingly.

The situation will worsen as Medicaid spending continues to balloon in the coming years. Program expenditures totaled nearly $576 billion in 2016. By 2025, Medicaid is expected to cost $958 billion.

Activists pushing for Medicaid expansion refuse to acknowledge these bleak realities. Utah Decides Healthcare, the advocacy group spearheading the signature-gathering campaign in the Beehive State, claims Medicaid expansion would protect “our state’s most vulnerable citizens.”

Research from other states suggests otherwise. Expanding Medicaid to able-bodied, childless adults would wallop taxpayers and divert resources from the truly needy — without improving the health of these newly enrolled beneficiaries.

Read more . . .

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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