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Hospitals that can’t explain costs shouldn’t be trusted to predict Obamacare’s price tag

Hospitals that can’t explain costs shouldn’t be trusted to predict Obamacare’s price tag

Wayne Hoffman
September 21, 2018
Wayne Hoffman
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September 21, 2018

It’s ironic that Idaho’s big hospitals can’t tell you how much a medical procedure will cost but they have perfect clairvoyance to declare that Obamacare’s Medicaid expansion will save Idaho money. Well, here’s some advice for ya: Don’t trust the cost estimates from an industry that can’t explain why it charges $630 for a Band-Aid.

The Idaho Hospital Association’s members want Obamacare expanded, not because it would be a boon to the economy or because it will be good for taxpayers. Rather, IHA members want expansion because it will give them more revenueread tax-funded subsidies. This is exactly what has happened for hospitals in the other expansion states.   

The hospital lobbying organization continues to overlook the fact just a couple of years ago, Milliman predicted that Medicaid expansion would cost Idaho $3 billion more than its newest guesstimates.

This week, the Heartland Institute and the Idaho Freedom Foundation produced a report that concludes: States that have used Milliman’s cost estimates have been socked with significant cost overruns. In other words: Milliman is notorious for underestimating Medicaid expansion costs. And, while Milliman picks up its taxpayer-funded check, taxpayers are left to pick up the millions in cost overruns.

“For years, [Milliman] has published cost fiscal analyses for states interested in expanding Medicaid, and it often has provided forecasts that show Medicaid expansion would cost relatively little. In some cases, Milliman has even projected taxpayers would save money. Unfortunately, states that have expanded Medicaid based on these estimates have wound up paying hundreds of millions more than Milliman predicted,” write researchers Charlie Katebi of Heartland and Lindsay Atkinson of IFF. Katebi and Atkinson looked in particular at Indiana and Iowa, the latter ended its contract with Milliman this year because, according to media reports, Milliman's Medicaid calculations were off by as much as 40 percent.

It’s meaningless that the IHA paid for a separate study to show that federal Obamacare spending would generate economic activity and jobs for Idaho. It’s meaningless because everyone makes the same claim about all federal spending, from the tiniest grant to the biggest entitlement program. It’s the same Keynesian logic that prevents Congress from dialing back federal spending and keeps states from rejecting federal grants of all measure. It’s part of the reason why our nation is $21 trillion in debt and climbing.

Here are some predictions about Medicaid expansion that will, unfortunately, come true. Expanding Medicaid will cost Idaho more than you’ve been told. The expansion will haunt Idaho’s budget just as it has in states across the country, including California, which is drowning in Medicaid red ink. In Idaho, Medicaid will siphon whatever money might have been available for public schools, infrastructure, and natural resource agencies. It already is.  

Earlier this month, IHA’s Brian Whitlock equated Medicaid expansion to the implausibility of win-win-win scenarios such as finding out from your doctor that you can eat pizza everyday while losing weight and lowering your cholesterol. I’ve known Whitlock for years. He’s a good guy. He has a job to do. But it’s doubtful that Medicaid expansion will deliver on Whitlock’s assertion that the Gem State can expand government healthcare with zero negative consequences.

Some hospitals charge $40 for moms to hold their newborn babies. You pay nothing for me to warn you that too much pizza without exercise will make you fat. Government programs will always cost more than expected.

Photo credit: St. Luke's Facebook page.

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