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This Version of Expanded Medicaid is Not Better

March 4, 2016 Posted by Patrick Marvin - No Comments

If you didn’t know better, you would think that certain legislators in Augusta suffer from short-term memory loss.

Every session since the passage of Obamacare, Maine legislators have debated liberal bills that would force Maine to add thousands of people to our expensive and inefficient Medicaid program.

And every time, (five if you are keeping track) sanity has prevailed, and these bills have been defeated.

Yet somehow, two Maine State Senators have forgotten all of this, and have put forth another Medicaid expansion bill

To be fair, this time around, the Medicaid proponents have a slightly different modus operandi. The sponsors of this bill have foolishly attempted to tie Medicaid expansion to the heroin crisis in Maine, and have said that adding more people to this government health care program will solve our addiction crisis.

But this is not just unreasonable – it’s also reprehensible. Connecting an unwanted public policy to a legitimate public health crisis for political expediency is both shocking and shameful.

This latest iteration of Medicaid expansion is also unique because it contains a gimmicky component that attempts to make this expensive pill easier to swallow.  It would have individuals who earn between 138% and 100% of the Federal Poverty Level (FPL) pay a small premium for their Medicaid insurance.

This model of a Medicaid expansion isn’t new – it was actually ripped off from proposals from Wyoming and Tennessee. But unsurprisingly, both of these existing proposals have already been rejected in their own states.

The Tennessee plan was resoundingly defeated, and failed to even make it out of a legislative committee. The Wyoming proposal also was dumped while still in committee, as legislators there recognized that this was a reckless and wasteful public policy.

But the case against the Medicaid expansion doesn’t end there. As has been said many times before, there are three major reasons why Medicaid expansion is wrong for Maine:

1) It’s too expensive

As pointed out by Department of Health and Human Services Commissioner Mary Mayhew, Medicaid expansion would not be cheap.

In the 2016-2017 biennium, the state of Maine would be expected to dole out roughly $53 million if we expanded Medicaid. That figure would more than double to $107 million in the 2018-2019 biennium, and then increase to an astounding $140 million between 2020 and 2021.

Maine simply does not have the financial resources to carry out this type of expensive and costly endeavor.

The state already has thousands of needy Mainers on waitlists for care, as it does not have the funding to help everyone who is deserving of assistance. We have finally balanced our Medicaid budget, and have paid off past debt owed to Maine hospitals.

With legislators focusing on cutting taxes, and trimming the size of our government, this is not the time to be spending millions more on Medicaid for political purposes.

2) The growth estimates will be wrong

Nearly every state that has expanded Medicaid has seen its actual enrollment in the program shatter projected enrollment.

California saw more than 2.3 million individuals join Medicaid when it expanded eligibility, but only estimated that 800,000 would join the program.

Kentucky estimated around 150,000 would enroll – but that number was actually more than 310,000.

Washington budgeted for less than 250,000 new Medicaid enrollees. In actuality, over 500,000 people signed up.

Proponents of Medicaid expansion who claim that this would be a modest increase to the program are flat-out wrong. This is a major policy shift, and a huge financial burden.

I’m sure that liberals will estimate that only a few thousand people (which is still an enormous number) would be impacted by Medicaid expansion. But you can trust that number will be way off.

3) We’ve already been down this road

Maine has already expanded Medicaid once before.

In 2002, Maine expanded Medicaid to cover childless adults who make up to 100% of the federal poverty level.

Supporters claimed that just 11,000 individuals would enroll in the program, and that it would be a wise policy move. They said that charity care, (when an individual receives care free of charge from a hospital) and uninsured levels would decrease, there would be fewer “hidden costs” on patients with private insurance, and there would be fewer Emergency Room visits.

But this was far from what happened.

Within 14 months of expanding Medicaid, 14,000 people had enrolled in the program. Many of these people already previously private insurance, but simply gave it up in favor of Medicaid. This meant that the uninsured rate did not change at all, as people simply chose to abandon their private insurance in favor of receiving care on the taxpayer’s dime.

Emergency Room visits and charity care also did not decrease, meaning that there were no cost savings, and no benefit for taxpayers or patients. The only effect was that Maine was spending millions more on Medicaid coverage for those who already had private insurance.

Given Maine’s past experiences expanding Medicaid, and the fact that Maine will likely reject another Medicaid expansion for the sixth time this session, you have to hope that Maine liberals will soon learn their lesson.

So maybe next session they will remember what happened before, give up the political games, and stop trying to expand Medicaid.