Affordable Care Act / America / Healthcare / Labor Force / Medicaid / Medicaid Expansion

Is Medicaid Expansion Something To Be Proud Of?

In the State of The Union, President Obama touted that 9 million Americans had received insurance through the Affordable Care Act (ACA). Of these 9 million Americans, 3 million enrolled in private insurance plans and 6 million enrolled in Medicaid. But these numbers and their forecasted impact on health care delivery are misleading.

First of all- the 3 million enrollees the President claimed to have enrolled in private plans is deceptive. Only 70 percent of these 3 million people have actually paid for their plans. This would be comparable to Amazon counting every item a customer places in their shopping cart prior to checking out as a sale. Furthermore, of those 70 percent who have successfully paid for their plan, 66 percent already had insurance and were forced to purchase a new plan when their coverage was suddenly dropped due to the ACA. The president was correct however to report that 6 million Americans enrolled in Medicaid.

However, Medicaid is a lowquality plan aimed at low-income individuals. It provides some coverage but it is not a health plan Americans should be excited to have. As a result, Medicaid expansion should not be considered a means to improving access to quality health care for millions of Americans. The Oregon Health Insurance Exchange study, the first randomized controlled study analyzing Medicaid outcomes, recently concluded, “Medicaid coverage generates no significant improvements in measured physical-health outcomes.” Other additional studies show that, in some cases, Medicaid patients actually wait longer and receive worse care than the uninsured. At best, Medicaid recipients can expect outcomes equal to or worse than what others not on Medicaid would receive.

Medicaid is an important social safety net. The program was initially designed to protect the most vulnerable citizens in American society. However, expanding eligibility to working adults (including those earning 400 percent above the poverty line) stands only to reduce resources that should be limited to caring for the most vulnerable. A recent CBO report concluded, “expanded Medicaid eligibility … will, reduce incentives to work.” The president talks a lot about inequality. Working has the ability to increase one’s social mobility. The ACA and its Medicaid expansion programs would essentially increase inequality. Medicaid only provides benefits to individuals at the very bottom of the income ladder. This program is not for everyone and expansion may exasperate its existing problems.

Medicaid has significantly lower reimbursement rates than private insurance and Medicare. On average, Medicaid reimburses doctors 72 cents for each dollar they spend on treating patients. In 2008, New York’s Medicaid reimbursement rate was 29 cents per every dollar spent. An analysis published in Health Affairs found that only 69 percent of physicians accept Medicaid patients most likely due to Medicaid’s low reimbursement rates. Medicaid makes it increasingly difficult for doctors remain profitable. Increasing the number of Americans enrolled in Medicaid has the potential to force more doctors to reject the insurance. A study in the New England Journal of Medicine found that Medicaid recipients are six times more likely to be denied an appointment than individuals with private insurance. According to another study, Medicaid patients wait an average of 42 days to see a doctormore than twice as long as the privately insured. A University of Virginia study found that surgical patients on Medicaid have a 97 percent higher chance of in-hospital death than patients with private insurance, and a surprisingly 13 percent greater chance of in-hospital death than those with no insurance at all. These studies confirm Medicaid is an inferior health plan. Doctors do not always accept it and in comparison to other health plans Medicaid often produces worse health outcomes.

Medicaid expansion is not the best way to improve access to quality health care. Medicaid expansion could actually reduce the quality of care for millions of Americans previously enrolled in private insurance plans. These Americans lose their more expensive, but higher quality insurance plans when their state chooses to expand its Medicaid program.

It is important to remember that Medicaid is a state program monitored by CMS. Not all state Medicaid programs are equal. Some provide better outcomes than others. However, on the whole Medicaid costs taxpayers $450 billion a year and offers on average suboptimal outcomes for the millions of Americans forced into it. The federal dollars earmarked to expand state Medicaid programs would be better spent helping low-income individuals buy private health insurance. The fact that the Obama Administration is adding millions of Americans to the Medicaid programs should not be touted as an accomplishment, but rather a travesty of justice.

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