Thirty states and the District of Columbia have chosen to expand their Medicaid programs under the Affordable Care Act (ACA), also known as Obamacare. Twenty states, including Louisiana, have refused to do so.
In an article for the Washington Post, Louisiana Gov. Bobby Jindal (R) said expansion would cost his state $1 billion over the first 10 years. The Louisiana Senate rejected a proposal to move the vote to a referendum, thus ensuring no expansion would occur until after the 2015 gubernatorial election.
Since implementation of ACA, spending on Medicaid has grown dramatically. Peter Ferrara, a senior fellow of The Heartland Institute, warns total future costs to state governments are estimated to exceed the costs picked up by the federal government by an additional 66 percent. States will find the situation unsustainable.
The New Orleans Times-Picayune reports all four of the major candidates for governor support some form of Medicaid expansion, extending health care coverage to nearly 300,000 more people. The federal government has promised to cover 100 percent of the costs of newly eligible enrollees until 2017, but the matching rate declines over time, so states will eventually have to find other ways to pay for the newly eligible population.
Moreover, the 100 percent coverage applies only to newly eligible enrollees. For those currently eligible for Medicaid and required to enroll under the individual mandate, the state will receive only the lower, regular matching rate. This means state costs for Medicaid are increasing even for those states not expanding their Medicaid programs. Medicaid is already stretching states thin financially and has a poor track record of providing cost-effective, efficient care for those in need.
Legislatures in some Republican states, including Indiana, Tennessee, Utah, and Wyoming, have attempted to address the concerns of conservative legislators and constituents by adding “free-market” components to expansion proposals, such as using Medicaid funds to purchase private insurance or imposing premiums or copays to ensure recipients have “skin in the game.” These so-called free-market models have several shortcomings.
First, the programs still represent an expansion of the failed Medicaid system, where multiple aspects of the insurance plan are dictated by the federal government and the beneficial elements of real market competition are lost. Although some of the “private insurance” models proposed by the states include more substantive reforms, such as copays and employment requirements, the Centers for Medicare and Medicaid Services (CMS) have largely rejected those proposals. The waiver process under which these proposals would be implemented is expensive, slow, and arbitrary. There is no guarantee any waiver would be granted or renewed down the road.
Louisiana legislators should continue to resist Medicaid expansion and instead reform their fiscally unsustainable program in ways that offer better care to enrollees and lower costs for taxpayers. Solutions to consider include Florida’s pilot program, known as the “Medicaid Cure.”
The program is a premium support model providing Medicaid recipients with a range of plans from which to choose, dramatically improving health care competition and consumer choice.
Medicaid is an expensive program that provides very poor quality care, yet health care providers and employers continue to push states to expand the program. Instead of expanding a flawed model that is overly costly, delivers subpar health care, and shifts more power to the national government, state lawmakers should focus on reform options such as Florida’s Medicaid Cure, which reduce costs and offer better care.
The following documents provide additional information about state Medicaid reform.
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.
Legislature: Beware of the Louisiana Medicaid Expansion Myths
http://www.bayoubuzz.com/buzz/item/1031573-legislature-beware-of-the-louisiana-medicaid-expansion-myths
Jeffery Sadow separates the myths from the facts about Medicaid expansion in Louisiana.
Understanding the Impact of a Medicaid Expansion in Louisiana
https://heartland.org/policy-documents/understanding-impact-medicaid-expansion-louisiana
The Louisiana Department of Health and Hospitals outlines previous analyses of the impact of Medicaid expansion in Louisiana, the considerations and assumptions included, updates to these assumptions, and continuing uncertainties.
The Obamacare Expansion Enrollment Explosion
https://heartland.org/policy-documents/obamacare-expansion-enrollment-explosion
The Foundation for Government Accountability examines the rapid rise in the number of able-bodied adults on Medicaid after the launch of Obamacare: “In fact, after just one year of ObamaCare expansion, several states have already seen more adults sign up for Medicaid welfare than they thought would ever sign up or even be eligible.”
Research & Commentary: States Should Innovate, Not Expand Medicaid
http://heartland.org/policy-documents/research-commentary-states-should-innovate-not-expand-medicaid
Matthew Glans of The Heartland Institute discusses how expanding Medicaid causes problems extending beyond state budgets and the health care industry, and he notes better options are available: “It is important to remember government spending creates little or no income or economic growth; it is merely the redistribution of tax dollars taken from the pockets of taxpayers.”
A Cure for What Ails Us
http://heartland.org/policy-documents/cure-what-ails-us
Justin Owen, Trey Moore, and Christina Weber of the Beacon Center argue the U.S. health care system is broken and politicians in Washington, DC have consistently failed to deliver on promises to repair it. Health care costs continue to grow while access to care shrinks. Many industry leaders say the Patient Protection and Affordable Care Act represents reform in name only.
Policy Tip Sheet: Medicaid Expansion
http://heartland.org/policy-documents/policy-tip-sheet-medicaid-expansion
Kendall Antekeier of The Heartland Institute explains why states should avoid Medicaid expansion and instead reform this fiscally unsustainable program in ways that would offer better care at lower costs to taxpayers.
Healthy PA Can’t Cure Obamacare Disease
http://www.commonwealthfoundation.org/policyblog/blog_detail.asp?id=6096
Elizabeth Stelle and Nathan Benefield of the Commonwealth Foundation argue the Healthy PA proposal falls short of providing meaningful reform in exchange for putting more people and more money into Obamacare’s house of cards.
The Empty Promises of Arkansas’ Medicaid Private Option
http://heartland.org/policy-documents/empty-promises-arkansas-medicaid-private-option
The Foundation for Government Accountability examines the empty promises of Arkansas’ Private Option program for Medicaid. It rebuts, point-by-point, direct quotes from supporters, including media interviews, floor speeches, and social media posts.
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 explains the success of the Medicaid Cure program in Florida: “When the patient is the priority, government and HMO bureaucrats are finally held accountable. Costs flatten and patient health and satisfaction improves.”
Why States Should Not Expand Medicaid
https://heartland.org/publications-resources/publications/why-states-should-not-expand-medicaid
Writing for the Galen Institute, Grace-Marie Turner and Avik Roy outline 12 reasons states should not expand Medicaid and should instead demand Washington, DC give them greater control over spending to better fit coverage to states’ needs, resources, and budgets.
‘Skin-in-the-Game’ Medicaid Expansion Did not Work in Oregon
http://idahofreedom.org/skin-in-the-game-medicaid-expansion-did-not-work-in-oregon/
Brandon Hershey of the Idaho Freedom Foundation examines Medicaid expansion in Oregon, the problems it has faced, and the lessons Idaho could learn from its experience: “Oregon’s attempt to fund Medicaid expansion via high premiums and copayments proved an unsuccessful endeavor. As Medicaid costs grow – dramatically should Idaho choose to expand – implementing cost sharing will not help the poor in Idaho. As alternatives and solutions are discussed, this is one idea that should be thrown away. Medicaid expansion – no matter what the packaging is – will do nothing but place a burden on Idaho’s most vulnerable.”
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 https://heartland.org/topics/health-care/index.html, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Logan Pike, Heartland’s state government relations manager, at [email protected] or 312/377-4000.
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance.
