States across the country, including New Hampshire, are currently debating whether to expand their Medicaid programs under the Patient Protection and Affordable Care Act (PPACA). A New Hampshire study commission will begin meeting this month to consider the implications of expansion.
If New Hampshire expands its Medicaid program to individuals at 100 to 138 percent of the federal poverty level, the federal government will pay 100 percent of the cost of newly entitled Medicaid beneficiaries for the first three years beginning in January 2014. The federal government’s subsidy will decrease thereafter. Supporters of expansion argue it would be ill-advised to reject this “free money,” and they say expansion will give insurance coverage to more of New Hampshire’s neediest residents.
If expansion is implemented, most states, including New Hampshire, will find costs exceed savings as the federal match rate drops. In 2010, New Hampshire spent $1.3 billion on Medicaid with a population of only 1.3 million people. A study conducted by The Heritage Foundation and Urban Institute found Medicaid expansion in New Hampshire would cause a swift surge in spending beginning in 2017, rapidly exceeding any modest savings from cutbacks in state expenditures to providers for uncompensated care. The expansion is estimated to cost New Hampshire taxpayers a total of $126 million through 2022.
There are also no assurances the federal government won’t lower the Medicaid matching rate. Avik Roy of the Manhattan Institute notes, “During the ‘supercommittee’ deficit-reduction talks last year, President Obama proposed reducing federal funding for the Medicaid expansion by $100 billion over ten years, with states picking up the difference.”
The Josiah Bartlett Center for Public Policy found that in states that have previously expanded Medicaid, such as Oregon, “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years.” Bartlett Center scholar Charlie Arlinghaus asked, “Is it a good public policy to adopt a program we can tell from experience will largely just shift people from private insurance to Medicaid?”
Instead of expanding a Medicaid program that already delivers inadequate health care access to New Hampshire citizens and guarantees higher costs to taxpayers, New Hampshire lawmakers should focus on employing alternate ways to increase health care access.
The following documents offer additional information about Medicaid expansion.
New Hampshire Medicaid Statistics
The federal government’s Medicaid Web site offers insight into New Hampshire’s taxpayer costs for the health care entitlement program.
Policy Tip Sheet: Medicaid Expansion
Kendall Antekeier of The Heartland Institute explains why states should avoid Medicaid expansion and instead reform their fiscally unsustainable programs in ways that will offer better care at lower costs to taxpayers.
Total Medicaid Spending
The Kaiser Family Foundation shows how much each state contributed in fiscal year 2010 total Medicaid costs.
On Medicaid Expansion, Rhetoric Isn’t Reality
Charlie Arlinghaus of the Josiah Bartlett Center for Public Policy identifies misleading elements of the current debate on Medicaid expansion.
Obama and the Medicaid Expansion
The Heritage Foundation documents the future cost implications of Medicaid expansion on a state-by-state basis.
Research & Commentary: States Should Avoid Medicaid Expansion
Kendall Antekeier of The Heartland Institute explains the U.S. Supreme Court ruling on Medicaid expansion and outlines the fiscal consequences of expansion. “States should think twice about giving up more control of their Medicaid programs only to further expand a system that is already fiscally unstable,” she writes.
Updated: Battle Lines: A Guide to the Budget Committee of Conference
Joshua Elliot-Traficante of the Josiah Bartlett Center for Public Policy explains why New Hampshire decided to implement a study commission to further discuss Medicaid expansion.
Ten Principles of 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 End of Federalism: How Obamacare Will Impact States
This fact sheet from The Heritage Foundation outlines the consequences of expanding Medicaid programs to meet federal requirements.
Medicaid: To Expand or Not to Expand
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 a heavy financial burden upon states, and expand an already broken system.
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, Heartland’s free online research database at www.policybot.org.
If you have any questions about this issue or the Heartland website, contact John Nothdurft Heartland Institute’s director of government relations at [email protected] or 312/377-4000.