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Medicaid report shows millions gone missing, more reason to skip expansion

Medicaid report shows millions gone missing, more reason to skip expansion

Wayne Hoffman
December 1, 2012
Wayne Hoffman
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December 1, 2012

A new report about a key government entitlement program is out, and it provides more reason for Idaho lawmakers to reject any expansion of Medicaid. The federal Government Accountability Office (GAO) discovered that two databases used for tracking Medicaid expenditures don't match up at all.

In fact, there's a $43 billion difference between what states reported spending and the tracking done by the U.S. Centers for Medicare and Medicaid Services, which pays the federal government's portion of the $459 billion program for the poor and disabled. In layman's terms, taxpayers spent a bunch of money, and no one really knows where the money went.

The GAO's probe shows Idaho is one of six states where the state's reported Medicaid expenditures were higher than whatthe CMS database said it was. In the 2009 spending year, Idaho reported more than $1.32 billion in Medicaid expenses, while CMS recorded $1.28 billion. Government auditors say inconsistent data reporting, lengthy delays in states reporting and differences in the databases may bear some of the blame. But really, it is all a big mystery.

U.S. Sen. Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, said the report is further evidence that what Medicaid really needs is a massive overhaul, not a massive expansion.

The question of Medicaid expansion will soon be in the hands of Idaho lawmakers and Gov. Butch Otter. The president's health care law allows Medicaid to cover more people who have better financial means than under the current program.

Come January and the convening of the Legislature, there will be plenty of voices telling state officials to jump into the enlarged Medicaid pool with both feet. Much of the reason Idaho is contemplating the idea is because people without insurance and who are not covered by Medicaid tend to enter Idaho's county-state program for paying health care costs, and that program comes with no federal help.

And proponents of Medicaid expansion use back-of-the-napkin style accounting to insist that Idahoans would "save" money should lawmakers opt for a bigger Medicaid program, wherein the federal government pays all the expanded care costs (but not administrative costs) in the first years.

Of course, to buy that argument we'd have to ignore the fact that Idahoans pay federal taxes, too, which is why expansion proponents should probably come up with a different marketing strategy besides arguing that somehow it won't cost taxpayers anything. Or that it would save money. Or that expansion is otherwise a victimless crime that would reduce costs. None of that is true.
And now we learn that the federal government isn't even sure how billions of dollars has
been spent in this massive program.

In the next few weeks, I will share a smarter idea for caring for our friends and neighbors who don't have insurance and who don't qualify for Medicaid. And I'll share some ideas for making Idaho's Medicaid program less costly while improving patient outcomes.

In the meantime, the GAO is sending out a warning signal, to both the states and the federal government: Even federal auditors can't figure out what's going on with Medicaid, and how billions of dollars that are part of the program have simply vanished.

One wonders how such a problem would get better by making the program bigger.

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