Wednesday, January 02, 2019

OCPA column: Medicaid expansion a budget-buster

Medicaid expansion a budget-buster
by Jonathan Small, president of the Oklahoma Council of Public Affairs (OCPA)

When Oklahoma lawmakers assemble in February, they will face pressure to add hundreds of thousands of able-bodied adults to welfare.

They will be assured by many experts that expanding Medicaid under Obamacare will be cheap – in government terms – and that the federal government will foot most of the bill.

But those experts are wrong. They have been wrong every time.

Medicaid was created as a medical safety net for the most vulnerable poor – expectant mothers, children, the elderly, and the disabled. Obamacare lures states to expand Medicaid to cover childless, able-bodied adults who earn up to 138 percent of poverty income.

Since 2010, more than 30 states have taken the Medicaid expansion bait. In every case where we have numbers, the costs far exceeded predictions.

The Foundation for Government Accountability (FGA) studied the first 24 states to expand Medicaid. States expected 5.5 million new recipients; they got 11.5 million. In a report this year, FGA concluded “every state with available spending projections and actual cost data reveals that taxpayers have spent roughly 157 percent more on Obamacare expansion than state officials initially predicted.”

It’s not just state officials who got it wrong. The Centers for Medicare and Medicaid Services, the Congressional Budget Office, the Kaiser Family Foundation, the Urban Institute, and others grossly underestimated the numbers.

Even without expansion, Medicaid’s current growth rate is fiscally unsustainable. The U.S. Department of Health and Human Services estimated total Medicaid spending could reach $1 trillion per year by 2026. Right now, Medicaid is already almost a third of all state spending. Including federal reimbursement dollars, Medicaid accounted for 30 percent of the $18.2 billion spent by Oklahoma state government last year. Adding hundreds of thousands of new people would bust that budget faster and give us two dire alternatives – raise taxes or slash other services, like education or welfare benefits to even more vulnerable people.

Governor-elect Kevin Stitt opposes Medicaid expansion. But thanks to out-of-state labor unions, it may find its way to a statewide ballot in Oklahoma.

“The California union that funded successful ballot campaigns expanding Medicaid in three red states is already looking ahead to 2020,” Politico reported in November. “SEIU-United Healthcare Workers West is eyeing several states where it could bypass GOP legislatures and take Medicaid expansion proposals straight to voters – deploying millions of dollars and an army of advocates.”

The experts will again assure us that Oklahoma can absorb a vast expansion of medical welfare for the able-bodied. And just as they have been in more than 30 states so far, they’ll be dead wrong.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.


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