The Affordable Care Act (ACA) allows states to expand Medicaid to cover individuals making up to 133 percent of the federal poverty level. Currently, 26 states and Washington, DC are expanding their Medicaid systems, 19 are not expanding, and five are still debating the issue.
Expansion supporters argue the program amounts to “free money” because the federal government promises to pay 100 percent of the cost of covering people made newly eligible for Medicaid until 2016; the percentage phases down to 90 percent in 2020. They also say governors can implement expansion without legislative approval because expansion is funded without using state funds until 2016.
In April, both Kansas and Tennessee passed laws preventing the governor from unilaterally expanding their state’s Medicaid program, requiring legislative approval for any expansion. Requiring legislative approval establishes the proper checks and balances of government and forces legislators to consider the wider implications of Medicaid expansion and how it would be implemented and funded in the long run.
Opponents of Medicaid expansion note the program is already stretching states thin financially and has a poor track record of providing cost-effective and efficient care for those in need. Medicaid is currently the largest category of state spending: according to the National Association of State Budget Officers, Medicaid spending accounts for 23.6 percent of state government expenditures. Given the impact of Medicaid spending on state budgets, it is inappropriate for any governor to bypass the legislature, as the latter is responsible for the budget and will be held accountable for future deficits.
Contrary to expansion supporters’ depiction of the new federal funds as “free money,” Medicaid expansion is expensive, creating new costs the federal government may not always be able to cover, leaving state taxpayers on the hook for the new liabilities. There is much reasonable doubt that the federal government will be able to pay for the expansion in the long run.
Without significant reforms, Medicaid will remain fiscally unsustainable. States that haven’t yet expanded Medicaid should require legislative approval for any future expansion. It is undemocratic to allow a governor to unilaterally expand the largest category of state budget expenditures.
The following articles examine Medicaid expansion and the Kansas and Tennessee proposals in greater depth.
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.
Research & Commentary: Examining the Arkansas Medicaid Expansion Model
Matthew Glans of The Heartland Institute examines the Arkansas Medicaid expansion model and argues state lawmakers should instead consider reform options that reduce costs and offer better care to patients in the current system, like the system being tried in Florida.
Kansas Governor: Medicaid Expansion Decision Up to the Legislature
In this article from Governing, the authors discuss new legislation that prohibits Medicaid expansion in Kansas without legislative approval.
After One Last Spat, Bill Requiring Legislative Approval of Medicaid Expansion Goes to Governor
Knoxblogs discusses legislation in Tennessee that requires specific approval of the House and Senate for any expansion of Medicaid in the state. The article discusses the lengthy debate on the issue, which began last year.
Brownback Signs Bill Saying Medicaid Expansion Decision Rests with Legislature
Bryan Lowry of the Wichita Eagle reports on the Medicaid legislative approval legislation in Kansas and the reactions from critics and supporters of the bill.
The Effect of Federal Health Care ‘Reform’ on Kansas General Fund Medicaid Expenditures
This paper from the Kansas Policy Institute examines the impact the Patient Protection and Affordable Care Act, commonly referred to as Obamacare, will have on the Kansas budget.
A Cure for What Ails Us: State-Led Healthcare Solutions to Fix Washington’s Botches
This report from the Beacon Center of Tennessee outlines problems facing the health care system, offering in-depth policy discussions and recounting real-life experiences of Tennesseans who are already coping with and preparing for the effects of PPACA.
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 offer better care at lower costs to taxpayers.
Research & Commentary: The Medicaid “Cure”
Kendall Antekeier of The Heartland Institute examines the Medicaid Cure, a pilot program established in five large Florida counties, which uses 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
The Foundation for Government Accountability provides insight into the success of the Florida Medicaid Cure: “When the patient is the priority, government and HMO bureaucrats are finally held accountable. Costs flatten and patient health and satisfaction improves.”
The Private Option: Medicaid Expansion by Another Name
Nicole Kaeding of Americans for Prosperity provides a forecast of the effects of the decision to expand Medicaid in Arkansas.
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 from Washington greater control over spending to better fit coverage expansion with their states’ needs, resources, and budgets.
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.
If you have any questions about this issue or the Heartland Institute Web site, contact Heartland Institute Government Relations Director John Nothdurft at [email protected] or 312/377-4000.