Biased White House Medicaid Expansion Report

July 9, 2014

A new White House report on state Medicaid expansion says that declining to expand Medicaid is the wrong decision for states, says Charles Blahous of Economics21. The report, entitled "Missed Opportunities," claims that expanding Medicaid would benefit public health, state budgets and the economy.

Blahous breaks down these three arguments:

  • While the White House is correct that expanding Medicaid increases insurance coverage, increasing coverage does not mean that expansion will improve health outcomes. Furthermore, Blahous notes that purchasing all health services through insurance encourages consumption and only drives up prices.
  • As for state budgets, while those newly eligible for the program are largely covered by federal funding, the ACA will also bring other Americans -- who were previously eligible for Medicaid -- out of the woodwork. For those individuals, states must cover 40 percent of their costs, on average. Costs to cover these individuals are already exceeding state projections.
  • To the claim that expanding the program will help the economy, the government is asserting that federal spending under the ACA to stimulate demand is good for the economy. Yet, the White House has previously said that reducing federal health care spending was necessary to boost economic growth. These two things cannot be true simultaneously, says Blahous.

While he notes that the White House is free to argue in favor of the Affordable Care Act, Blahous criticizes the report for being one-sided.

Source: Charles Blahous, "A One-Sided White House Report on Medicaid Expansion," Economics21, July 7, 2014. 

 

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