Wyoming Legislators Reject Governor’s Medicaid Expansion Plan

Published February 26, 2016

Wyoming legislators have again denied Gov. Matt Mead’s (R) request to expand Medicaid, this time by excluding it from a budget draft.

Wyoming’s Appropriations Committee, composed of members of the Wyoming House and Senate, voted in January to remove Medicaid expansion from Mead’s biennial budget proposal for 2017–18. The Senate later rejected Medicaid expansion directly, voting down Senate File 129 on February 6. By some counts, the decision marks the ninth time since 2014 Wyoming lawmakers have declined to expand Medicaid. In 2015, the measure failed in a Senate floor vote.

Proponents of Medicaid expansion in the state are expected to press the issue again later in 2016.

Unpredictable Expansion Costs

Mead initially opposed expanding the program, but he changed his position in 2014, citing his concern many Wyoming citizens remain unable to afford health insurance and his disappointment that the state is missing out on millions of additional federal dollars. Republican lawmakers continue to oppose expansion.

“Because Wyoming has taken a slower approach, they have the benefit of seeing how expansion has unfolded in other states,” said state Rep. Tim Stubson (R-Casper), Wyoming House speaker pro tempore. “We know that the projections have been wildly inaccurate and the costs in other states have been much higher than projected.”

Charlie Katebi, health care policy analyst at the Wyoming Liberty Group, points to Ohio as proof that expanding Medicaid can be unpredictably expensive.

“Ohio Gov. John Kasich signed Medicaid expansion into law expecting only 366,000 individuals to sign up for the program,” Katebi said. “Yet, by June of 2015, 600,000 had enrolled, almost twice as many as expected. The state share of Ohio’s Medicaid expansion is now expected to cost the state $50 million, or about 134 percent, more than projected in 2017.”

Tax Hikes, Service Cuts

Wyoming citizen-activist Lisa Glauner, who attended an Appropriations Committee hearing on the bill in January, says she fears adding pressure to the state budget by expanding Medicaid could result in tax increases or reductions in public services.

“The money provided by the federal government to cover Medicaid expansion is temporary.” Glauner said. “What happens when people become dependent on the program and the funding stops? Taxes are raised.”

Katebi offers California as an example of politicians passing the buck to taxpayers. He says after California expanded MediCal, the state’s Medicaid program, covering more than one million additional enrollees than anticipated, California was forced to require an additional $110 million from taxpayers.

Katebi says the unexpectedly high Medicaid spending has caused reductions in other services.

“The Tax Policy Center found that the more Medicaid spends, the less states have to spend on other programs and services,” Katebi said. “Across all states between 1985 and 2000, state allotment for Medicaid and other means-tested benefits grew [by more than] 27 percent. At the same time, aid to higher education fell 9 percent and highway funding dropped 20 percent.”

Expanding Medicaid could also hurt Wyoming’s private insurers, Katebi says.

“The private health insurance market in our state is very fragile,” Katebi said. “One of our largest companies—and one of only two to offer policies through the exchanges—has now gone into receivership. I have great concern that pulling 5,500 people out of that market could have significant impacts on people across Wyoming who are paying their premiums month after month.”

HSAs for the Needy

Proponents of Medicaid expansion argue declining to grow the program will cause Wyoming to continue spending millions on health care for the uninsured without sufficiently helping the state’s poor.

Katebi disagrees, saying when Medicaid costs skyrocket with booming enrollment, states typically cut the program’s payments to doctors and hospitals to control costs, leaving patients without the care they need.

“Enrolling patients on Medicaid effectively locks them into a program that delivers inadequate health care,” Katebi said. “A better alternative would be to offer disadvantaged patients a flat-cash subsidy that’s deposited into their own personal health savings account (HSA), which could be used to purchase private insurance or pay for their health care directly through a concierge practice.”

States Need Flexibility

Katebi says the ability to use HSAs would give states more control over health care costs for the indigent and would provide better access to care.

“Health savings accounts would be ideally financed and administered directly by the states so they can effectively determine who should be eligible, without interference from the federal government,” Katebi said.

Contrary to what the National Governors Association is telling governors, Katebi says governors can’t negotiate with the federal government to design a Medicaid expansion proposal that fits the needs of their individual states. Under federal statutes, states that expand Medicaid have no choice but to pay the state’s share for all newly enrolled, eligible individuals.

Jenni White ([email protected]) is co-founder of Restore Oklahoma Public Education and a former public school science teacher.

Internet Info:

Thomas Kane, Peter Orszag, David Gunter, State Fiscal Constraints and Higher Education Spending: The Role of Medicaid and the Business Cycle, The Tax Foundation, May 22, 2003: https://heartland.org/policy-documents/state-fiscal-constraints-and-higher-education-spending-role-medicaid-and-business-c