NCPA - National Center for Policy Analysis

States Should Just Say No to Medicaid Expansion

December 10, 2012

Democrats are desperately hoping the states will accept the Medicaid expansion being foisted on them by President Obama's health care law, but they may be disappointed, says Merrill Matthews, a resident scholar at the Institute for Policy Innovation in Dallas, Texas.

The primary reason for their concern is blatantly self-serving: ObamaCare's success, like its RomneyCare prequel in Massachusetts, will be judged solely by how many uninsured people get coverage. If states refuse the Medicaid expansion, which the U.S. Supreme Court has ruled they can, the whole idea of universal coverage goes out the window. And ObamaCare will be judged a failure.

Currently, nine states have rejected the Medicaid expansion and six are leaning against it; 13 have said yes and four are leaning toward it. For states that are still undecided, here are several reasons they should reject the expansion.

  • Medicaid Is Bad Coverage -- Medicaid is the worst health insurance coverage in the country, and yet ObamaCare did nothing to fix its many problems. Take access to physicians. The Texas Medical Association published a survey showing that the number of Texas doctors willing to accept new Medicaid patients has declined from 42 percent in 2010 to 31 percent in 2012, in large part because Medicaid pays doctors so little.
  • The Cost to State Budgets -- Medicaid spending has been growing at about 8 percent a year, compared to economic growth of 1 percent to 2 percent. But ObamaCare puts Medicaid on growth hormones. Total Medicaid spending (state and federal) is projected to grow from about $400 billion to about $900 billion by 2020. At 23.5 percent, Medicaid has become the biggest budget item for most state budgets, surpassing K-12 education.
  • Federal Controls -- While a bipartisan coalition of governors has asked Washington for more flexibility over their Medicaid program, ObamaCare doubles-down on federal control.
  • Rampant Fraud -- No one knows for sure how big the Medicaid fraud problem is, but estimates put it in the range of $60 billion a year.
  • Loss of State Sovereignty -- Medicaid is supposed to be a federal-state program. But the Medicaid expansion is one more effort by the federal government to micromanage the states and what they do.

Source: Merrill Matthews, "Seven Reasons States Should Just Say No to Medicaid Expansion," Forbes, December 7, 2012.


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