Medicaid expansion: An offer Michigan must refuse

July 24, 2013

In an effort to gain support for expanding Medicaid as part of President Barack Obama’s Patient Protection and Affordable Care Act, better known as Obamacare, Gov. Rick Snyder has traveled the state peddling promises. He claims Michigan can reduce the number of uninsured, decrease expensive emergency room crowding, and lower private health insurance premiums, all while saving tax dollars.

Looking at the experience of two states — Arizona and Maine — that voluntarily expanded their Medicaid programs long before President Obama took office, we can measure Snyder’s theories about how Medicaid expansion might work in Michigan against how it actually works in practice.

Snyder believes, as many people might expect, that expanding Medicaid eligibility will reduce the number of Michigan’s uninsured. Politicians in Maine and Arizona made precisely the same sort of predictions, yet neither state saw a reduction in the size of their uninsured population.

Arizona’s uninsured rate measured in at 19 percent in 2001, the year expansion took effect. Ten years later, it still lingered at 19 percent. Similarly, nine years and billions of dollars after expanding its Medicaid program, Maine’s uninsured rate also stood still at 12 percent.

It wasn’t for lack of enrollment. New enrollees under Arizona’s expansion guidelines tripled government projections — 150,000 parents (instead of 50,000) and 226,000 childless adults (instead of 80,000).

As a result, costs also ran amok. In Arizona, the government number crunchers got it terribly wrong. As it turned out, childless adults cost $7,300 to insure annually, not $2,800. With enrollment and costs running wild, legislators reacted by rationing coverage, freezing the program, reducing Medicaid reimbursement rates, and cutting benefits for services like organ transplants.

No matter how much they may have wanted to, proponents of expanding Medicaid just couldn’t make good on their promises.

Instead of reducing the uninsured rate, people actually lost private coverage, by 9 and 7 percentage points in Arizona and Maine, respectively. Taken alone, this disturbing trend ought to alarm policymakers who are deciding whether to take Michigan down a similar path.

Lobbyists for Michigan’s largest health care corporations are putting intense pressure on lawmakers to support expansion. Like Governor Snyder, they argue that insuring the uninsured will reduce uncompensated care costs, thereby lessening the need to shift these costs to patients to private health insurance.

Yet, the Arizona Hospital and Health Care Association reported in 2009 (eight years into Medicaid expansion) that uncompensated care had actually increased by an average of 9 percent annually. Maine too saw similar increases in uncompensated care, and in particular charity care, which doubled over ten year’s time, from $67 million to $215 million.

Claims that expanding Medicaid will decrease use of emergency room services don’t hold up under scrutiny either. A report released in 2009 by the Maine Emergency Department Use Work Group found that those on MaineCare visited the ER at a rate three times as high as the privately insured and almost twice as high as the uninsured, at a whopping 918 visits per 1,000.

President Obama’s own Department of Health and Human Services published a 2010 report that identified insurance status as the single biggest indicator of ER use, with “Medicaid beneficiaries being the most likely to have had an ER visit.” As it turns out, the “uninsured were no more likely than those with private insurance to have had at least one ER visit in a 12-month period.”

At best, Snyder’s promises are sincere but misguided. Experience shows us they’ll be hard, if not impossible, to keep. Rather than following him down this path, Michigan lawmakers should roll up their sleeves and find an alternative based in reality and results.

Scott Hagerstrom is state director and Annie Patnaude is deputy state director of Americans for Prosperity-Michigan.

This article was printed from The Detroit News on July 24, 2013:

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