This is perhaps surprising, given that many people don’t know much about Medicaid. This lack of knowledge has allowed politicians and others to try to sell Medicaid expansion as a cure all for many of Mississippi’s problems. To set the record straight, Medicaid is not a very good parachute for rural hospitals. It’s also not a very good way to boost the state’s economy. Medicaid is not even going to improve health care outcomes for the working poor. Medicaid expansion is going to be far more expensive than anyone predicts. It is also going to squeeze out funding for other priorities, like K-12 education and roads.
In order to understand what Medicaid is, we need to understand who benefits from it. One would think Medicaid most benefits the patients enrolled in it. The academic research indicates otherwise. To understand why, we have to acknowledge that merely holding a Medicaid insurance card does not guarantee health care. Medicaid is not health care; it is a government-subsidized health insurance plan. Compared to private insurance, however, Medicaid insurance is not very good. To begin with, it’s expensive: not for the people on Medicaid, but for the taxpayers who subsidize it. Second, many doctors don’t accept Medicaid because it pays less than private insurance and, sometimes, less than self-paying patients.
The Affordable Care Act (Obamacare) made a very expensive bet that one group, in particular, would benefit from expanding Medicaid. As it turns out, this bet was wrong. It’s instructive to realize who the ACA did not expand Medicaid coverage to. Not low-income children, who are already covered under a program called CHIP. Not disabled people, many of whom are languishing on home and community based Medicaid waiting lists. Not the elderly, who are already eligible for Medicare. Rather, the ACA expanded Medicaid to able-bodied, working-age adults earning up to 138 percent of the federal poverty level.
Every one of these people already have access to health care, thanks to a federal law called EMTALA, which requires hospitals to treat anyone who enters an emergency room, regardless of ability to pay. Substituting Medicaid coverage for EMTALA coverage will not change the quality of care for most of these patients. Thus, researchers have found that Medicaid expansion “increased the use of health-care services,” but “had no statistically significant effect on physical health outcomes.” In turn, the same team of Ivy League researchers concluded that the primary beneficiaries of Medicaid expansion are hospitals.
Basically, Medicaid expansion is a backdoor mechanism Mississippi hospitals hope to tap into to pay for the unfunded mandate that is EMTALA. The trick for the hospitals is that Medicaid does not pay very well. Thus, their goal is to steer Medicaid patients toward lower-cost services that will provide a larger profit margin. For some hospitals, this will work. For others, it won’t. The hospitals are willing to roll the dice on Medicaid expansion, but Mississippi voters are not.
Recent polling by Mason-Dixon found that 55 percent of Mississippi Republican primary voters are less likely to support a candidate who votes for Medicaid expansion. This number soars to 70 percent when voters realize that Medicaid expansion will compete for funding with other priorities, like K-12 education, roads and bridges, and the state retirement system. I believe these voters intuit that Medicaid expansion is a bad bet – not because they don’t care about low-income adults or rural hospitals or poor children (who, again, are already covered by SCHIP!).
Mississippi voters care about all these issues, they just think there are more targeted ways to help each of these groups. Consider that the best way to help the working poor is to encourage them to obtain a good job. Yet, nationwide, more than half of Obamacare Medicaid recipients are not working.
Is it any surprise, then, that Medicaid expansion has been far more expensive than expected in the states that have tried it? According to analysis by Jonathan Ingram and Nicholas Horton, “States have consistently and grossly missed their expansion enrollment projections, already signing up more than twice as many able-bodied adults than they anticipated would sign up at any point in the future.” As a result, Medicaid is squeezing out other state budget priorities, consuming “one out of every three dollars in state budgets.” This includes Indiana, whose 2.0 “reform” cost more in year one than a traditional expansion would have cost and is forcing lawmakers to find new sources of revenue via tax and fee increases. It also includes Arkansas, whose Medicaid expansion cost almost twice as much as predicted, far more than traditional expansion, and whose attempts to rein in costs with a work requirement have been nullified in court.
If state lawmakers want to help rural hospitals, they should craft a credible plan to do so. Likewise, there are many ideas – ranging from deregulating charity care to encouraging nonprofit hospitals to do their fair share – that could increase health care access for low-income, able-bodied adults. Throwing Medicaid money at these problems would be a lazy, foolish, and expensive gamble. Mississippi voters know better.
This column appeared in the Clarion Ledger on August 11, 2019.