10 Reasons Not to Expand Medicaid Under Obamacare

Plus a Bonus Reason!

  1. More people will enroll than projected – making access to Medicaid-accepting providers that much more difficult for those that already rely on the program.
  2. It will cost much more than projected – accounting tricks and overly-optimistic budget projections won’t stop the reality that other states have already experienced. Medicaid expansion is a budget buster and often takes away from other priorities.
  3. Medicaid expansion opens the door to massive increases in fraudulent and improper payments.
  4. Medicaid expansion causes people to shift from private insurance plans to Medicaid – this crowd-out hurts health care providers and lures people into a broken health plan that won’t be there when they need it.
  5. Medicaid recipients are already forced to wait too long to receive care – if they can get an appointment at all.
  1. Medicaid recipients already receive lower quality care.
  2. Many people who sign up for Medicaid expansion are already eligible for the program – and the state is on the hook for a higher percentage of their costs.
    • There is a noticeable “woodwork effect” – that is, when a state makes efforts to enroll the newly eligible population, individuals who were already eligible but hadn’t signed up for Medicaid “come out of the woodwork”. In the initial wave of Obamacare and Medicaid expansion enrollment efforts, states saw a woodwork effect of about 10%, meaning a 10% growth in the traditional Medicaid enrollee population above the anticipated enrollment rate.
    • This makes a difference for a state because these previously eligible individuals receive a lower match rate in federal funding – meaning more money comes out of the state coffers to pay for these individuals. Fiscal projections often do not account for the increased costs associated with the woodwork effect as these individuals don’t officially “count” as a cost of Medicaid expansion.
    • To make matters worse, HHS audits continue to uncover states misclassifying enrollees as part of the newly eligible Medicaid population versus the traditional population. This means that many states are currently underpaying for their share of the Medicaid program. If required to comply with federal law, expansion states will be forced to increase their share of funding for their Medicaid programs.
  3. Once a state expands Medicaid under Obamacare, there’s no going back – there’s no way to trim or limit expansion enrollment if costs spiral out of control.
  4. States are always at risk of the federal government finding ways to make them shoulder more of the expansion costs.
    • While the federal government could alter its FMAP (matching) rate for traditional or expansion Medicaid enrollees, it’s far from the only way it could make states pick up more of the tab.
    • As previously mentioned, the federal government could become more stringent in enforcing Medicaid enrollee classification at any time – instantly increasing a state’s required share of Medicaid funding.
    • The federal government could also further crack down on the use of provider fees to fund a state’s share of Medicaid funding – a practice it has long detested because provider fees, in effect, reduce a state’s actual share of Medicaid spending, while drawing down more federal dollars. While there are currently limits on the practice, the federal government could certainly go further if it chose – leaving states scrambling to find additional funding sources. This is not a hypothetical, legislation to do this very thing is regularly considered by Congress.
  5. Medicaid expansion has made Medicaid insurers a lot of money, but little of that money directly benefits patients.

Bonus Reason: There are so many other things states can do to increase access to care, improve quality of care, reduce costs, and increase health care options for patientswe call these reforms The Personal Option. Best of all, The Personal Option doesn’t require lawmakers to sign away control of the state budget or push people into substandard health plans.

Medicaid Expansion Is Wrong for Kansas

Tell Lawmakers You Oppose Medicaid Expansion