Policy Documents

Research & Commentary: Utah Medicaid Expansion

January 9, 2014

Most states across the country already have decided whether to expand their Medicaid programs as part of Obamacare. Currently, 26 have chosen to expand their programs starting in 2014, and 22 states have refused to do so. Medicaid is already stretching states thin financially and has a poor track record of providing cost-effective and efficient care for those in need.

Utah Gov. Gary Herbert has not yet decided whether to accept federal money for Medicaid expansion. In December, a Legislative Health Reform Task Force outlined and recommended three Medicaid expansion scenarios for the Utah Legislature. The first would keep the status quo and leave the Medicaid eligibility rules unchanged. The other two plans follow an approach pioneered in Arkansas that would avoid a direct Medicaid expansion but give low-income Utahans public dollars to buy private insurance. According to the Salt Lake Tribune, both of these plans would cover the same number of people as a full Medicaid expansion without actually expanding the state’s Medicaid rolls. 

The two plans differ in scope. One provides public dollars for the purchase of private insurance for the full expansion population consisting of those earning up to 138 percent of poverty. The second provides public dollars for those under the federal poverty level, while Utahans earning at least the poverty level and up to 138 percent of that amount would shop with federal subsidies on the federal health exchange. 

Like the Arkansas “private option,” these plans have several shortcomings. First, despite the private market feel of the programs, they still represent an expansion of Medicaid, where multiple aspects of the insurance plan are dictated by the federal government, such as cost-sharing, and the beneficial aspects of real market competition are lost. Second, once expansion occurs, it will be extremely difficult to roll back. Critics of the expansion in Arkansas note there is no guarantee the federal government will allow the program to continue once it is up for renewal, and could replace it with a less market-based system. 

Medicaid expansion is an expensive endeavor. A 2013 analysis of Utah’s Medicaid options found expansion would cost the state’s taxpayers between $33.9 million and $328.2 million more than if the state chose not expand Medicaid. 

Recent research also casts doubt on whether Medicaid expansion improves the care patients receive. A study published in the New England Journal of Medicine (NEJM) examined outcomes from Oregon’s Medicaid program and found expansion fails to achieve the principal goal of any health care reform: improving people’s overall health. 

Without significant reforms, Medicaid will continue to be fiscally unsustainable. Instead of expanding a flawed model that is overly costly, delivers subpar health care, and shifts more power to the federal government, state lawmakers should focus instead on reform options like those piloted in Florida that reduce costs and offer better care to patients in the existing system. 

The following articles offer additional information on state Medicaid expansion. 
 

Expanding Medicaid in Utah Will Cost Taxpayers Millions
http://sutherlandinstitute.org/news/2013/06/05/expanding-medicaid-in-utah-will-cost-taxpayers-millions/
Derek Monson of the Sutherland Institute discusses the findings of a state-funded report on the impacts of Utah’s pending decision on Medicaid expansion. 

State of Utah Medicaid Expansion Assessment
http://heartland.org/policy-documents/state-utah-medicaid-expansion-assessment-impact-analysis-2014-2023
The Public Consulting Group, funded by the State of Utah, estimates Medicaid enrollment and costs and savings in Utah under multiple scenarios and with differing enrollment populations. 

Research & Commentary: The Medicaid “Cure”
https://heartland.org/policy-documents/research-commentary-medicaid-cure
Writing for The Heartland Institute, Kendall Antekeier examines the Medicaid Cure, a pilot program established in five large Florida counties by Gov. Jeb Bush, a premium support model in which 290,000 Medicaid recipients are given a range of premiums and plans from which to choose. 

A Medicaid Cure: Florida’s Medicaid Reform Pilot
http://www.floridafga.org/2011/11/a-medicaid-cure-floridas-medicaid-reform-pilot/
The Foundation for Government Accountability gives insight into the Medicaid Cure’s success, stating, “When the patient is the priority, government and HMO bureaucrats are finally held accountable. Costs flatten and patient health and satisfaction improves.” 

Does Your State Benefit From the Medicaid Expansion?
http://news.heartland.org/newspaper-article/2013/03/14/does-your-state-benefit-medicaid-expansion
This interactive map, built on numbers from the left-leaning Urban Institute modeled forward by the right-leaning Heritage Foundation, presents the amounts each state is expected to have to spend under the Medicaid expansion over the next ten years. 

Why States Are Rejecting Obama’s Medicaid Expansion
http://news.heartland.org/newspaper-article/2012/07/09/why-states-are-rejecting-obamas-medicaid-expansion
Benjamin Domenech, a senior fellow at The Heartland Institute, outlines several reasons states are refusing to expand their Medicaid programs in the aftermath of Obamacare. 

Ten Principles of Health Care Policy
http://heartland.org/policy-documents/ten-principles-health-care-policy
This pamphlet in The Heartland Institute’s Legislative Principles series describes the proper role of government in financing and delivering health care and provides reform suggestions to remedy current health care policy problems. 

The Oregon Experiment—Effects of Medicaid on Clinical Outcomes
http://www.nejm.org/doi/full/10.1056/NEJMsa1212321
This article from the New England Journal of Medicine examines Medicaid outcomes in Oregon. Oregon offered researchers the opportunity to study the effects of being enrolled in Medicaid (compared to uninsured) based on data from a randomized controlled trial, the “gold standard” of scientific research. The results showed no improvement in enrollees’ health, but greater financial protections and increased medical spending. 

Research & Commentary: States Should Avoid Medicaid Expansion
http://heartland.org/policy-documents/research-commentary-states-should-avoid-medicaid-expansion
Kendall Antekeier of The Heartland Institute explains the Supreme Court ruling on Medicaid expansion and urges states to avoid expansion. “States should think twice about giving up more control of their Medicaid programs only to further expand a system that is already fiscally unsustainable,” she writes. 

Medicaid: To Expand or Not To Expand
http://americansforprosperity.org/legislativealerts/medicaid-to-expand-or-not-to-expand/#ixzz1zUzEWz00
Nicole Kaeding of Americans for Prosperity argues states should avoid expanding their Medicaid programs because doing so would support the flawed and expensive federal health care law, place heavy financial burdens on the state, and expand an already-broken system.  

The End of Federalism: How Obamacare Will Impact States
http://www.heritage.org/research/factsheets/the-end-of-federalism-how-obamacare-will-impact-states
This brief fact sheet from The Heritage Foundation outlines the consequences of expanding Medicaid programs to meet federal requirements. 

Medicaid Expansion: We Already Know How the Story Ends
http://heartland.org/policy-documents/medicaid-expansion-we-already-know-how-story-ends
Jonathan Ingram of the Foundation for Government Accountability takes a close look at Arizona, Maine, and other states that expanded Medicaid. The report finds expansion supporters have a poor track record of keeping their promises. 

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at http://news.heartland.org/health, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org. 

If you have any questions about this issue or the Heartland Institute Web site, contact Heartland Institute Government Relations Director John Nothdurft at jnothdurft@heartland.org or 312/377-4000.