Medicaid Expansion Causing Buyer’s Remorse

 

Marketing can be deceiving. Like those book clubs that offer you free books to choose up front but then obligate you to buying books in the future.

The buyer’s remorse of book club members is now being felt by state lawmakers who chose to expand Medicaid under The Affordable Care Act (ObamaCare). The government promised “free” Medicaid expansion for the first three years with declining support after 2016. Already the states that agreed to this deceptive deal are seeing the errors of their choice.

Thirty states and the District of Columbia took the deal and expanded Medicaid. Democratic lobbyists have joined with state hospital lobbies to pressure lawmakers in the remaining 20 states to follow. As a resident of Florida I have seen this battle in my own statehouse.

Evelyn Everton and Chris Hudson, state directors of the Utah and Florida chapters of Americans for Prosperity, write of their state’s experience in The Wall Street Journal.

The Utah state Senate passed a Medicaid expansion bill backed by Gov. Gary Herbert, who promoted the “free money” argument during his January State of the State address. The more conservative House, which noted the proposal’s $328 million price tag over 10 years, never passed the bill out of committee.

The battle in the state of Florida was even more heated. The Florida Senate tried to fold Medicaid expansion into the state’s annual budget. According to the Florida Senate Committee on Appropriations, the cost to the state taxpayers would be $96.6 million in the first two years, and a yet-to-be-determined amount when the state assumed its full 10% share in 2020.

The Florida House refused to pass the bill. A budget stand-off led to a 20-day special session in June. The House again rejected the Senate proposal by 72-41 after seven hours of debate.

Did Utah and Florida do the right thing by rejecting Medicaid expansion?

The experience of those states that did expand Medicaid is now coming into focus. The Associated Press reported in July, “At least 14 states have seen new enrollments exceed their original projections, causing at least seven to increase their cost estimates for 2017.”

The AP says that California expected 800,000 new enrollees after the state’s 2013 Medicaid expansion. The real number was 2.3 million. In New Mexico, new enrollment exceeded estimates by 44%. In Oregon actual enrollment exceeded expectations by 73% and in the state of Washington by more than 100%.

Needless to say this has crushed the budgets of these states. Illinois once projected that its Medicaid expansion would cost the state $573 million for 2017 through 2020. But enrollment has exceeded expectations by 200,000, leading to a new price tag of about $2 billion, according to the Chicago Tribune.

The situation is similar in Kentucky, often trumpeted by ObamaCare supporters as a model for others to follow. But enrollment numbers in Kentucky have forced officials to more than double the anticipated cost of the state’s Medicaid expansion for 2017. Original cost estimates of $33 million have risen to $74 million – and some estimate this number will grow to $363 million per year by 2021.

The Kentucky Health Cooperative, the largest insurer on the ObamaCare exchange, also imploded in October, leaving 51,000 residents without coverage.

The uproar in the state was a major factor in the recent elections that swept Republican Matt Bevin into the governor’s mansion replacing Democratic Governor Steve Beshear, who was responsible for both the Co-Op and the expansion of Medicaid.

Even in Ohio, where Governor John Kasich is running for president and strongly defending his move to expand Medicaid, there is brewing trouble. State spending on the program has grown by $5.8 billion since 2011. The Ohio Department of Medicaid projects that by 2017 spending will total $28.2 billion – a 59% increase during Gov. Kasich’s tenure – according to The Wall Street Journal.

Of course, unlike the federal government, which can run deficits, state governments must balance their budgets. That means hard choices between spending money on healthcare and other key priorities like education and infrastructure. When Medicaid spending skyrockets they are left with cutting spending on these other vital services, raising taxes, or both.

Everton and Hudson praise the Utah and Florida legislatures for resisting the temptation to expand Medicaid with “free money” from the government. It’s a good reminder of a truism we all should have learned long ago – there is no such thing as a free lunch!

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