NCPA - National Center for Policy Analysis

Medicaid Is Bigger, Not Better

January 27, 2015

Obamacare's Medicaid expansion expanded an already troubled program. According to Sally Pipes, president of the Pacific Research Institute, Medicaid costs had already been growing at 7 percent annually over the last 10 years.

But with the Affordable Care Act, which encouraged states to expand their Medicaid programs to adults up to 138 percent of the federal poverty level, the program has only gotten bigger: 27 states expanded their programs, putting the total number of Medicaid enrollees today at 65 million. For reference, that's one in every five Americans.

But does expanded Medicaid coverage mean better health care? Not at all, says Pipes. She notes that a study from 2011 found that one-third of doctors wouldn't accept new Medicaid patients, and according to a study in the New England Journal of Medicine, Medicaid patients were six times more likely not to get an appointment compared to Americans with private health insurance.

Why are doctors so unwilling to treat Medicaid patients? Because the program reimburses them at very low rates. In fact, Pipes says that providers spent a whopping $13.7 billion more caring for Medicaid enrollees than they received in government reimbursements in 2012.

How to solve this problem? Pipes suggests turning Medicaid into a block grant, which would give states flexibility in how they spend their Medicaid dollars. In fact, this is something that NCPA Senior Fellow John R. Graham recently suggested in a new report on antipoverty program reform. Congressman Paul Ryan (R-Wisc.) has suggested reforming America's welfare system with a program of "Opportunity Grants," but the Ryan proposal does not include Medicaid. According to Graham, safety-net reform without Medicaid makes little sense: Medicaid and the Children's Health Insurance Program made up more than 41 percent of all safety-net spending prior to Obamacare's Medicaid expansion.

Source: Sally Pipes, "Obamacare's Medicaid Expansion Is Nothing to Brag About,", January 26, 2015.


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