Medicaid Expansion Is a Prescription for Disaster in Maine

Published October 23, 2017

In November, Maine residents will be confronted with a ballot question asking them to expand MaineCare, the state’s Medicaid program, to cover additional recipients. If approved, this policy change would further inflate an already over-extended entitlement program and make thousands more dependent on a government welfare program.

The question asks voters to approve expanding MaineCare to individuals earning 138 percent of the federal poverty line or less, including individuals who are able-bodied but choose not to work. Able-bodied individuals without dependents, many of whom don’t have a good reason why they can’t support themselves, would be allowed to join a program intended to help the truly needy. Further, Medicaid expansion consumes finite resources that could otherwise be used to help those people who are disabled and incapable of working.

Giving more handouts to people is expensive, and the money has to come from somewhere. The Maine Heritage Policy Center, a nonpartisan think tank, studied the Medicaid expansion proposal, and its researchers concluded the cost of Medicaid expansion exceeds whatever benefits big spending advocates are promising. As authors Liam Sigaud and Jacob Posik note in the study, “Reject Medicaid Expansion: Unaffordable, Unfair, Unpredictable,” the taxpayer will get stuck with the steep bill:

Over the next five fiscal years, state spending on Medicaid would total nearly $400 million, reaching $100 million in 2022 alone and increasing steadily in subsequent years as medical inflation outstrips the rate of personal income growth. To put that in perspective, expansion would require an annual tax increase of about $180 on every household in Maine, or cuts to other programs.

Empirically speaking, other states’ Medicaid expansion programs have resulted in underestimated costs and enrollment numbers, and not much else. Such has been the case with the 32 states opting to expand Medicaid eligibility because of Obamacare’s financial incentives.

According to research from former Mercatus Center senior research fellow Brian Blase, the wave of Obamacare Medicaid expansions between 2014 and 2016 cost taxpayers $232 billion more than government planners expected. In 2014, the U.S. Department of Health and Human Services projected marginal costs for Obamacare’s Medicaid expansion — the cost of adding one more individual to the Medicaid rolls — would get less expensive as time went on. Unsurprisingly, the cost of adding more people to Medicaid actually increased: instead of declining 22 percent between Fiscal Years 2014 and 2015, Medicaid expansion’s marginal costs went up 29.5 percent.

If the goal is helping more people, and not just spending more money, then expanding Medicaid isn’t the solution. In fact, more Medicaid does the opposite of helping. Using data from the Kentucky Cancer Registry, a centralized state government database tracking cancer victims’ treatment and outcomes, Centers for Disease Control and Prevention researcher Kathleen McDavid found Medicaid recipients had a higher risk of dying than their counterparts on private insurance:

Medicaid patients with any one of the 4 cancers studied here had a higher risk of death within 3 years compared with patients privately insured. These results may reflect a scarcity of primary care physicians who are willing to see Medicaid patients for preventive care or screening.

The science, as they say, is “settled.” Public health is improved by making it easier for people to get private insurance, instead of pushing people onto Medicaid.

Rolling back unnecessary government regulations on insurance benefits and increasing the supply of high-quality health care by scrapping cronyist certificate-of-need laws would allow more hospitals and primary care providers to help Mainers. These are just two of the many time-tested and science-approved ways to promote consumers’ health.

Instead of campaigning to spend more money on an entitlement program proven to wreck state governments’ budgets and decrease patients’ quality of care, those who are serious about wanting to help people should be campaigning to make health care more affordable.

The diagnosis for Maine is government control over health care; the cure is more freedom for consumers and more accountability for how taxpayers’ money is spent.

[Originally Published in the RealClearPolicy]