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A Decade of Medicaid Expansion Disasters

In the decade since ObamaCare was officially implemented, 40 states have taken the federal government’s bait and embraced some form of Medicaid expansion, allowing able-bodied working-age adults with incomes up to 138 percent of the federal poverty level to enroll in the welfare program. The results have been disastrous.  

There is good news, though. The 10 remaining holdout states that have not expanded Medicaid don’t need to pass Medicaid expansion to find out what’s in it. They already know what to expect.

State budgets are being demolished

Despite federal promises to pay more for expansion enrollees’ benefits, states’ budgets are buckling under the weight of Medicaid expansion. Nationwide, enrollment in the expansion of Medicaid is nearly 160 percent greater than originally anticipated.

This massive over-enrollment, coupled with faulty federal policies during the COVID-19 pandemic, have left taxpayers on the hook for billions, and it’s been a challenge for states to regain control over their Medicaid programs. During the public health emergency, states were barred from even removing individuals who no longer qualified for the program. No matter what lies states have been fed about free government money, the truth is that Medicaid expansion states are constantly facing the difficult choice of either cutting funding for other state priorities or raising taxes to pay for additional Medicaid funding. And there’s no end in sight. Ten years into West Virginia’s Medicaid expansion, the Mountain State is now facing a Medicaid shortfall of $114 million.

Patients are losing private coverage

There are more than 3.6 million individuals across the remaining 10 non-expansion states that would be kicked off their private insurance and forced onto Medicaid. These 3.6 million individuals are currently eligible for silver-level health insurance, without having to pay a dime in premiums thanks to federal premium subsidies. Should their home states expand Medicaid though, they would be kicked off their private insurance and forced onto Medicaid.

Hospitals are being put at risk

Medicaid reimburses hospitals below the cost of care, leaving all hospitals with some degree of a Medicaid shortfall. States that have expanded Medicaid have experienced massive shortfalls leading to many hospitals’ downfall.

According to new research, while hospitals in non-expansion states saw their shortfalls rise by just six percent since 2013, hospitals in expansion states have seen their Medicaid shortfalls skyrocket by a whopping 117 percent over the same time period, totaling more than $22 billion. These struggling hospitals have been left with few options to stay afloat. They can either petition state governments for additional taxpayer dollars or charge private insurers more for the same care. And if they can’t find a way to turn a profit, they may close up shop altogether.

Just as Medicaid expansion kicks newly eligible able-bodied adults off of private insurance, and pushes them onto Medicaid, hospitals instantly feel the pinch since Medicaid reimburses providers at roughly 60 percent of what private insurers reimburse hospitals for coverage. Estimates suggest that hospitals in non-expansion states stand to lose nearly $5.3 billion just from the exchange crowd-out alone should their states adopt Medicaid expansion. 

The truly needy are being given an IOU

Medicaid expansion has many flaws, but none are as egregious as the way expansion treats the truly needy. The entire premise that the federal government will pay a greater share of able-bodied adults’ Medicaid costs than it will for traditional Medicaid beneficiaries’ costs is completely incongruent with the original purpose of providing health care services to truly needy people. Medicaid was designed to provide health coverage for low-income seniors, children, pregnant women, and those with disabilities, yet Medicaid expansion moves able-bodied adults to the front of the Medicaid line.

Research has already shown that many severely disabled individuals have been forced to wait for specialized care while Medicaid expansion enrollees receive services. Now, thanks to increasing Medicaid expansion costs, truly needy Medicaid beneficiaries are getting the shaft in new ways. Indiana, which expanded Medicaid in 2015, recently announced that they will be cutting payments to traditional enrollees’ caregivers to help reduce their $1 billion Medicaid shortfall in the state budget. 

Ten years later, busted budgets, hospital closures, and a welfare program that puts the truly needy on the back burner are no secret. The 10 remaining states that have not expanded Medicaid should continue to stand in firm opposition of Medicaid expansion, and those states that have already expanded Medicaid should reconsider their decision.

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