The existing Medicaid entitlement program began in 1965 as a government safety net to help poor children and their families earning less than 133 percent of the federal poverty level (FPL). Congress has steadily expanded the program to include aid for disabled and long-term care patients. By 1975, 10 percent of Americans were enrolled in Medicaid. This number grew to 20 percent last year. Medicaid enrollment in Washington state has grown 50 percent faster than the overall population since 1993 and now totals 1.2 million people.
The Affordable Care Act, or Obamacare, greatly expands Medicaid by adding any adult earning less than 138 percent of the FPL. The U.S. Supreme Court ruled that the federal government cannot force states to expand their Medicaid programs and that each state must make its own decision on expansion. The federal enticement is that funding for the Obamacare expansion would come exclusively from federal taxpayers for three years and then gradually culminate in a 90-10 federal-to-state match.
For state officials, this appears to be “free money” and state Democrats and Republicans across the country are supporting the Medicaid expansion. Estimates predict 280,000 to 500,000 Washington residents will be eligible for the new Medicaid program.
So, if it’s such a great deal, why not support the new expansion?
Worse, the federal government has grossly underestimated the cost of Obamacare. If states are forced to pay a “blended” rate close to the existing 50-50 match, the cost to Washington state taxpayers would jump to at least $12 billion over the first 10 years. And this cost would be on top of what Washingtonians pay as federal taxpayers.
Third, virtually every policymaker predicts a “coming out of the woodwork” or “welcome mat” effect, by which people who qualify but haven’t enrolled in the existing Medicaid program will do so. The Urban Institute estimates 545,000 Washington residents fall into this group. These people would only be eligible for the existing Medicaid plan and would add $14 billion in state taxpayer costs for the first 10 years.
Last, and most unfortunate, is that the Medicaid program does not provide good health care for patients. Except for very specific populations such as HIV/AIDS patients, there is no solid scientific evidence that Medicaid provides better health outcomes for patients than having no insurance at all.
Also, Medicaid pays providers on average only 40 percent of what private insurance pays. This shifts the financial burden to private insurance companies and reduces the number of providers financially able to see Medicaid patients. Each year access to health care for our existing Medicaid patients gets worse.