AFP Testimony Supporting HB 990 – Medicaid Expansion Requires Legislative Approval

February 24, 2014

Given to Jacobs House Judiciary sub-committee on Feb 19th, 2014.

We at Americans for Prosperity appreciate the opportunity to provide testimony today on HB 990, legislation which prohibits the expansion of Medicaid eligibility through increase in income threshold without prior legislative approval. For the record, we support this legislation.

Medicaid was created in 1965 as a health insurance program for low-income individuals. Like much legislation, the program is well-intended but has unintended consequences. Today, the system is a broken, costly program.

It is the single largest line-item in most state budgets, and half of the states have opted not to expand the Medicaid. While it’s funded jointly by federal and state governments, we all know that even though the federal government is committing to paying the majority of the expansion costs the first year, states will be required to pick up more of the costs in the future. And even the federal government doesn’t have the funds to continue to commit to programs we cannot afford.

In Georgia, estimates are that Medicaid could get somewhere between 500,000 and 620,000 new customers if it were expanded to cover people at or below 138 percent of the federal poverty level.

Medicaid expansion could cost Georgia taxpayers $4.5 billion over the next 10 years. Any move to encumber taxpayers should require legislative action.

Today, according to the US Department of Health and Human Services latest report out early this month, 101,276 individuals have selected a marketplace plan. Twenty-three percent of those are ages 16-34. A total of 272,262 are eligible to enroll and 51,531 are determined or assessed eligible for Medicaid/CHIP.

We at Americans for Prosperity would support block-granting Medicaid funds to Georgia, so policymakers in our state have greater opportunity to shape a program that works for Georgia.

Medicaid needs overhaul, not expansion. Medicaid is a broken health-care model. Its low reimbursement rates have resulted in fewer doctors accepting Medicaid. And studies consistently rank Medicaid at the very bottom when it comes to delivery of health-care quality relative to Medicare and commercial coverage.

There are unintended consequences in the Medicaid program. For instance, the program side that serves the elderly has a bias toward the costliest care settings – institutions and fee-for-service. Medicaid makes it easier to put a loved one in an institution than to care for that person at home.

And some states are exploring creative Medicaid strategies. For instance, Michigan is introducing cost-sharing features when it opens up its conventional Medicaid program to the expansion population.

Medicaid is a difficult program to manage, and states should be considered laboratiries of democracy, and giving state policymakers and leaders the opportunity to reform the program and empower individuals. Until that time, the cost is too great to our state economy and to our economic independence.

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