Effort to Expand Medicaid at the Ballot Box is Bad for Maine

February 22, 2017 Posted by Liam Sigaud - No Comments

They’re at it again. Having repeatedly failed to achieve Medicaid expansion through the legislative process, liberals in Maine have succeeded in putting it on the ballot this November. Despite the new tactics, much has stayed the same in the Medicaid expansion debate, including the overwhelming evidence that broadening Medicaid eligibility would destabilize the state’s finances. In states that have expanded their Medicaid programs, enrollment projections have routinely been exceeded, per patient spending on new recipients has shattered expectations, and budget shortfalls have become commonplace. If those things sound familiar, perhaps it’s because we’ve been down this road before.

In 2001, when Maine expanded Medicaid coverage to childless adults, DHHS projections indicated a long-term total of 11,000 new enrollees. Within just 14 months 17,000 had enrolled. In 2003, the state was forced to cap enrollment when it reached 25,000——more than double the original estimate. Despite these enrollment figures, Maine’s experiment with Medicaid expansion resulted in little to no reduction in our uninsured rates due to the fact that many people who would otherwise have purchased private insurance enrolled in the free, taxpayer-funded Medicaid program instead.

One need look no further than our neighboring New England states to see the debilitating budgetary effects of Medicaid expansion. In Massachusetts, Medicaid expansion led to a $230 million budget shortfall. In Rhode Island, 28,000 people were expected to sign up for Medicaid coverage by September 2014. However, in March of that year, some 64,000 had already enrolled, increasing original short-term cost estimates by $52 million. In New Hampshire, the Governor proposed cutting $7 million in nursing home funding to help pay for an unexpected $58 million cost overrun, caused largely by the state’s decision to expand Medicaid.

In addition to crippling state budgets and forcing lawmakers to cut important services, Medicaid expansion would do little to improve public health in Maine. Medicaid’s notoriously low reimbursement rates have led many providers–roughly 40 percent of office-based physicians, for example–to avoid taking on Medicaid patients. As a result, it is difficult for many Medicaid patients to get the access to care that they need. A study in 2011 found that 66 percent of children on Medicaid were denied appointments with specialist physicians, compared to just 11 percent of those with private insurance. Further, even in clinics that accepted both kinds of insurance, the waiting time for Medicaid patients was an average of 22 days longer. Medicaid is already failing to provide adequate access to health care for many Mainers; expanding the program would only exacerbate this problem and overburden the existing network of health care providers willing to accept Medicaid patients.

Finally, expanding Medicaid in the midst of uncertainty regarding the program’s policy outlook would be foolish. Congressional leaders have suggested that major changes to Medicaid may be enacted alongside the GOP’s overhaul of the Affordable Care Act. These reforms might include block-granting or changing the Federal Medical Assistance Percentage, which determines how much federal Medicaid funds states receive. In this context, it would be fiscally irresponsible to enact a sweeping expansion of Medicaid.

Medicaid needs reform, not expansion. Real reform will protect the health of the most vulnerable. It will expand choice, promote competition, improve the quality of care, and ensure fiscal sustainability. Although ObamaCare papered over these much-needed changes, Maine should strive to achieve true patient-centered, market-based health care reforms.