Topics: Obamacare

Most states cannot afford to expand Medicaid via Obamacare

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Congress,Op-Eds,Obamacare,Veterans Affairs,Medicare and Medicaid,Entitlements,Budgets and Deficits

Politicians and the public alike have recently focused much attention on efforts in Congress to defund Obamacare, but voter perception about the states’ role in the process is straight out of Tom Wolfe.

“It’s like a boulder rolling down a hill — you can watch it and talk about it and scream and say 's--t!' but you can’t stop it. It’s just a question of where it’s going to go,” Wolfe has said.

His observation applies now because a crucial battle is taking place in the states — one in which they can do a lot more than watch and scream, although who knows where the law is going to go.

States have had to decide whether to accept the Medicaid expansion under Obamacare since last year’s Supreme Court ruling allowed them to do so without necessarily losing access to federal funds.

Last week, Pennsylvania became the 24th state to jump on the bus. Twenty-one other states have refused, and five remain undecided on the issue.

Despite recent hurdles and Obamacare's growing unpopularity, state politicians still are strongly tempted to accept federal funds.

States are wont to deny benefits to their citizens, and some allegedly conservative governors have even argued that if Washington is shelling out cash, why should they “just say no?”

But those who choose Medicaid expansion miss the full picture. For instance, Washington will cover expansion’s full cost for only the first three years. Afterwards, each participating state’s share climbs to 10 percent by 2020.

And although that figure may seem insignificant, many expect that looming federal debt obligations will force Washington to cut its contributions and eventually leave the states liable for more of the tab, when states will likely be unable to avoid their costly Medicaid obligations.

This fact is worrisome considering that status quo Medicaid spending is already dominating many struggling state budgets at the expense of other programs.

States may decide that Medicaid expansion is financially desirable, although the evidence suggests otherwise. But another element comes into play.

Expansion supporters argue that new Medicaid enrollees inevitably will be better off, and the debate is whether “helping” citizens is worthwhile.

But money aside, the real problem with Medicaid expansion is that, too often, it makes patients even sicker — that is, when Medicaid is not killing them.

A University of Virginia study found in 2010 that “surgical patients on Medicaid are 13% more likely to die than those with no insurance at all, and 97% more likely to die than those with private insurance.”

The authors theorize that this result may originate from poorly structured Medicaid reimbursement schemes, which can deprive the disadvantaged of higher-quality care.

Similarly, an Oregon experiment found that uninsured people who were randomly enrolled in Medicaid after the state’s expansion did not enjoy significantly better health outcomes than those who remained uninsured.

The study “showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years.”

One might imagine that the uninsured get superior care than those on Medicaid because so many of them use emergency rooms as primary care facilities.

However, this study analyzed treatment of cholesterol, glycated hemoglobin levels, depressions screenings and other matters unlikely to be addressed in emergency facilities.

Medicaid expansion also often displaces private insurance rather than covering new people. For instance, research for the Department of Veterans Affairs by Steven Pizer, Austin Frakt and Lisa Lezzoni in 2011 suggested that when Medicaid expands, 80 percent of new enrollees previously held private insurance.

So even if Medicaid expansion is designed to extend coverage to today’s uninsured, taxpayers will end up underwriting many people who already can afford insurance.

Medicaid expansion is simply not a financial risk worth taking — and strong evidence suggests that this entitlement jeopardizes human health and well-being.

Given Medicaid’s numerous flaws and many states’ burgeoning budget problems, for most states, accepting federal money to expand Medicaid is no cure at all.

Jonathan Bydlak is the president of the Coalition to Reduce Spending.
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