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Beware of funding promises made by Medicaid expansion proponents

Beware of funding promises made by Medicaid expansion proponents

Brandon Hershey
July 3, 2014

Medicaid “redesign” has its usual share of proponents and opponents, but there is big win in store for the state’s hospitals if Medicaid expansion is passed in the coming legislative session.

Gov. Butch Otter has appointed a Medicaid task force to develop some recommendations for him by Sept. 1.

At the most recent task force meeting, IdahoReporter.com quoted Steve Millard, task force member and president of the Idaho Hospital Association, “We have a real opportunity here to expand Medicaid and to do it on the federal dime. That is good for Idaho, and my association is prepared to spend money on this to make it happen.” Small wonder.

According to the Urban Institute, the total revenue for the next 10 years for hospitals would be $5 billion with Medicaid expansion. Without expansion, the revenue drops by $1.5 billion, to $3.5 billion. Institute research also suggests that for every dollar in private revenue Medicaid expansion will eliminate, hospitals will gain almost $3 in taxpayer funds.

Idaho would be wise to look at other states before leaping into expanding Medicaid. States that have experimented with Medicaid expansion prior to the passage of the Affordable Care Act have seen the program fail multiple times.

Arizona expanded Medicaid in 2002 to include childless adults under the federal poverty level of 138 percent. The Grand Canyon State had to cap enrollment in 2011 for the expanded Medicaid because of the out-of-control enrollment numbers that the state failed to accurately predict. Expansion in Arizona did not change the percentage of uninsured in the state, but merely maintained the same levels.

The Arkansas Private Option, the “champagne of Medicaid expansions,” started in January of this year. By the end of May the state’s expansion program had exceeded budget by $7.7 million.

Expanding Medicaid in Idaho relies on federal funds and the promise that the federal government will pay 90 percent of the costs. Really? With a debt of more than $17 trillion?

The federal government rarely follows through with funding promises to the states. Medicaid expansion will bring the state’s hospitals a pile of reimbursements, but at what cost to state’s taxpayers and future generations?

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