Medicaid Expansion By Any Name Is Bad


It’s important to keep your eyes on the goal. The goal we can all agree on is improving healthcare for all Americans. That goal is not achieved if we put the uninsured in healthcare systems that fail to deliver quality healthcare.

ObamaCare is largely increasing the number of insured Americans by increasing the rolls of Medicaid. The Urban Institute survey of ObamaCare enrollment confirms this trend (Figure 1). A Heritage Foundation study by Edmund F. Haislmaier reports 71% of the expansion of the insured comes from Medicaid.

Uninsurance trends

Is this a good thing or a bad thing? How you answer that question will largely determine what you think of the expansion of Medicaid by ObamaCare. Most people would assume that being on Medicaid is better than having no insurance at all. But actually, there is abundant research that documents patients on Medicaid have poorer healthcare outcomes than the uninsured and much poorer outcomes than those people with private insurance. (see Medicaid Expansion Doesn’t Save Lives)

ObamaCare originally called for all 50 states to expand their Medicaid eligibility guidelines to conform to the newly established federal standards. But the Supreme Court ruled that the federal government could not coerce the states into conformity. So each state has decided on their own. Thus far, only 27 states have elected to expand Medicaid under the ObamaCare guidelines.

Medicaid Expansion With Private Insurance

Putting more people on private healthcare insurance rather than Medicaid is a good thing. If states can accomplish that with the help of the federal government, then I’m for it. But often in situations like this, “the devil is in the details.”

Many states are now considering alternatives to Medicaid to insure those low-income people who “fall through the cracks” of the ObamaCare system. There is such a gap in coverage for those people who earn too much to be eligible for Medicaid and too little to be eligible for taxpayer subsidies on the insurance Exchange. The Exchange subsidies begin at 100% of the Federal Poverty Level (FPL) and are capped at 400% of FPL. But if your state’s eligibility guidelines for Medicaid are below 100% of FPL (and most are) then you may be ineligible for both.

Some states, like Wisconsin, have actually lowered Medicaid eligibility ceilings to place more people in private insurance. In 2009, before ObamaCare, people in Wisconsin earning less than 200% of FPL were placed on Medicaid. The state quickly found they couldn’t afford that and four months later they closed enrollment. Now they have lowered the ceiling to 100% of FPL, which means those no longer eligible for Medicaid will be eligible for subsidies on the private Exchange.

Other states, like Florida, face a different problem. Their Medicaid eligibility caps at 30% of FPL for parents and 19 and 20 year olds, but doesn’t cover childless adults at all. (Children up to age 18 are eligible up to 133% of FPL.) If you’re a parent earning more than 30% of FPL, but less than 100% of FPL, you aren’t eligible for Medicaid nor for federal subsidies on the Exchanges. This has prompted efforts to find a way to provide health insurance using federal dollars to purchase private insurance.

A Healthy Florida Works

The Florida legislature is considering a private expansion of Medicaid called A Healthy Florida Works. This plan, put forth by a coalition of Florida businesses, chambers of commerce, business associations, and hospitals, attempts to tap into federal funding under ObamaCare. The state rejected the original expansion of Medicaid offered under the new healthcare law. Will this plan be any better or is it just Medicaid expansion by a prettier name?

The plan summary makes the following claims:

  • Improves access to quality, affordable health care– The details of this plan currently available don’t stipulate what rates will be for providers. The big problem with Medicaid is poor access to healthcare because the fees paid to providers are too low. Unless this plan improves provider fees above current Medicaid rates, the plan will suffer from the same access problems as Medicaid. They may call it something else, but it will still be Medicaid.
  • Promotes personal accountability ­- This is a laudable goal but it must be approved by the Obama administration. The plan currently calls for 12 months of continuous premium payments, an annual wellness check-up with a primary care physician, and participation in Job and Education Training (JET) activities. It is unlikely they will allow such accountability to be enforced. Look for these provisions to be axed in the final draft of the bill.
  • Good for Florida businesses ­– This will certainly be true for some businesses – most likely those in the insurance and hospital industries.
  • Improves the state’s economy ­There is bound to be some short-term economic stimulus when large amounts of federal dollars flow into the state. But just as the Obama stimulus package of 2010 failed to provide much national economic improvement, don’t look for growth in the state of Florida from this stimulus, either. The larger question is what happens to the state’s economy when the federal dollars begin to recede in 2017 – and every year thereafter. Remember, the national debt has exceeded $18 Trillion under President Obama and continues to rise.


Supporters of this proposal are anxious to get Florida’s share of the federal dollars being offered by ObamaCare. Naturally, those promoting this come from the business sector eager to cash in on the taxpayer’s largesse. But the real question we should be asking ourselves is this: “Will the uninsured be better off than they are now?” Unless the insurance provided is better than Medicaid, the answer is no.

One comment

  1. don’t understand FPL requirements…where can I go to receive more information on this and examples

    Comment by stan hand on January 12, 2015 at 9:13 pm