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As Medicaid costs swell, lawmakers should prioritize expansion repeal

As Medicaid costs swell, lawmakers should prioritize expansion repeal

Fred Birnbaum
October 18, 2022
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October 18, 2022

You can usually tell when a major program that is the cornerstone of the modern socialist project isn’t working as promised, because the establishment media avoids talking about it. I am speaking of Medicaid, the program originally designed to provide health care services to those receiving welfare benefits: low-income children without parental support, the blind, and individuals with disabilities. 

After years of resisting the “free federal money” to expand Medicaid to able-bodied adults, Idaho voters approved expanding Medicaid with Proposition 2 in 2018. 

Mind you the voters didn’t expand Medicaid in a vacuum. The entire medical establishment, the Idaho Association of Commerce and Industry, the establishment media, every leftist group, and every Democrat politician as well as Butch Otter (sporting a cowboy hat) were advocating for Medicaid expansion and singing the praises of “free federal money.”

There is a large problem and a small catch. The small catch is that the Legislature must review the impacts of Medicaid expansion and make a recommendation for its continuation.

Senate Bill 1204, approved in the 2019 session following the passage of Proposition 2, requires the following: “No later than January 31 in the 2023 session, the Senate and House of Representatives health and welfare committees shall review all fiscal, heath and other impacts of Medicaid eligibility expansion pursuant to this section and shall make a recommendation to the legislature as to whether such expansion shall remain in effect.” 

The large problem is that everything promised related to cost control has been obliterated and health outcomes haven’t been shown to have improved, even though the financial health of large hospitals has. 

In a normal world where the federal government can’t simply print money, the case for repealing expansion would make itself. Let’s make that case anyway.

In 2018, we were told that expansion would cost about $412 million per year. As the expansion took place during fiscal year 2020 (FY20), we didn’t have a full year, but we did in FY21. The original appropriation of $403 million was close to the original $412 million cost estimate for the first full year of expansion. The problem is the actual cost for FY21 was $670 million, about 66% higher. For FY22, the original estimate was $440 million, but the FY22 appropriation was $847 million, nearly double. 

The FY22 actual costs have not been made public yet. And as FY23 is the current fiscal year, we can only make an estimate based on the supplemental requests already proposed by the Department of Health and Welfare. That cost will likely be closer to $1 billion. 

And the Biden administration has added another wrinkle to the whole Medicaid program.

With the Covid pandemic, the federal government offered states an enriched federal match (Medicaid is a federal-state program). The federal government picks up about 70% of the total cost of Medicaid in Idaho, and the feds offered a higher match if Idaho (and other states) would only remove people from the Medicaid rolls who died, left Idaho, or voluntarily disenrolled. 

So, people who clearly didn’t qualify for Medicaid under the pre-Covid rules are now given presumptive eligibility in exchange for more free federal money. It is difficult to accurately estimate the exact number of those who weren’t eligible but now are, but it is likely well over 100,000. And the administration just extended the “public health emergency” through January, guaranteeing more federal money.

If your head is spinning, keep a couple of thoughts in mind. The first is that one of the reasons annual federal deficits routinely exceed $1 trillion and the accumulated federal debt is over $31 trillion is because of Medicaid and its expansion. And every state that voluntarily took the money has played a role in ballooning the federal debt. 

The second thought is that Idaho is at a crossroads. We can continue to hitch our wagon to the broken federal welfare train, or we can begin to regain some independence by repealing expansion, which would make us the first expansion state to do so. As I write this, the Biden administration is proposing a permanent change to federal rules making it easier to enroll in Medicaid, meaning even further growing the program.

Remember how the Affordable Care Act was seen by the left as a stepping stone to putting the entire medical system and the US population under the federal government’s thumb? Medicaid expansion was a first step, and Covid was an accelerant. Time for Idaho to jump off this run-away train.

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