Expanding Medicaid is a key element of the federal Affordable Care Act, more commonly known as Obamacare. Originally, the law required states to extend the public health program to cover individuals and families who make up to 138 percent of the federal poverty level. If a state refused, the feds would cancel all of its Medicaid funding.
The Supreme Court, however, rejected that coercive approach as unconstitutional. So the feds are pushing a sweet-sounding offer they hope the states won’t be able to resist: Expand Medicaid as we want and we’ll pay 100 percent of the new benefit costs for the first three years. After that, the feds will pick up a diminishing share of the added costs, finally bottoming out at 90 percent. The free funding does not cover a state’s higher administrative costs, however.
For one thing, Medicaid expansion is not a “catch-and-release” program. Once a state lowers eligibility standards, it’s virtually impossible politically to strengthen them again. This would leave Washington state taxpayers on the hook for huge sums of money.
According to the Heritage Foundation’s latest research, embracing the Obamacare Medicaid expansion would start costing our state more as soon as the feds’ share dropped below 100 percent in 2017. In the first 10 years after, Washington taxpayers would have to shell out as much as $119 million to help cover expansion costs.
That’s a lot of money, and it assumes that our increasingly debt-ridden federal government is somehow able to deliver all the funding national politicians are promising. We need to have serious, data-driven discussions about the costs and possible savings associated with Medicaid expansion. But one repercussion is indisputable: The proposed expansion would result in a substantial and permanent increase in the size and scope of state government.
If federal funding is reduced, Washington taxpayers would be forced to pay more, or other social programs would face cuts. And cuts in federal entitlement spending grow increasingly likely with every budget cycle. President Obama has already proposed cutting Medicaid payments to states. That was part of his last budget proposal. Now, the administration claims it will not cut Medicaid again. But those promises are good only as long as Congress doesn’t need to tap that money to pay for the federal government’s many other spending priorities.
Another thing to keep in mind: Extending coverage doesn’t assure that individuals will have access to the health care they need. It is already hard for Medicaid patients to find a doctor — primarily because Medicaid pays such low reimbursement rates. Obamacare tries to soften the blow by temporarily raising reimbursements, but that fleeting gesture ignores the more difficult math — that expansion will dump tens of thousands of new patients into a program that has no new providers. New and long-time patients alike will have a harder time finding a doctor and scheduling timely appointments. Meanwhile, doctors will spend less time with each patient, resulting in lower-quality care. After all, if Medicaid provides such great health care, why don’t members of Congress sign up for it themselves?
Medicaid should stay true to its mission of providing a health care safety net for the poor, and policymakers should focus on improving the quality of care that poor families receive, before they try to push it on other people. Instead of using Medicaid to massively expand government power and control over our health care system, it should be reformed to control costs and give low-income working people access to affordable private insurance and better-quality health care.
Drew Gonshorowski an Adjunct Scholar of Washington Policy Center and a policy analyst in the Center for Data Analysis at The Heritage Foundation in Washington, D.C.