By John Kay
Repeating something over and over again does not make it true. Case in point: Gov. John Bel Edwards’ claims about Louisiana’s Medicaid expansion.
The governor keeps telling us that the Obamacare expansion is saving money and that these savings will continue. He wants this to be true, since last year he promised taxpayers the expansion would save $1 billion over the next decade.
Many at the time, including local hospitals, rightly warned these projections were overly optimistic. Especially considering that to pay for itself, the governor’s expansion plan relies on a budget gimmick that even former Vice President Joe Biden called a “scam.” It’s a scheme wherein the state collects a provider tax from hospitals and then returns the funds to the hospitals in the form of higher Medicaid payments. These payments make it appear that the state is spending more on Medicaid, thereby increasing federal Medicaid matching funds and essentially swindling federal taxpayers.
Despite these tricks, the sad reality is that Medicaid expansion in Louisiana is on track to bust through projected enrollment numbers by nearly 150,000, which the state’s interim Medicaid director conceded would diminish savings.
Like other governors around the country, Gov. Edwards was lured by the federal government’s promise to cover at least 90 percent of the cost of Medicaid expansion — a commitment that’s now on shaky ground as the health care battle rages on in Washington. But it turns out, this “free federal money” is rather expensive.
In every expansion state, enrollment far exceeded expectations, causing serious sticker shock from Kentucky ($3 billion over budget in the first two and a half years), to Ohio ($4.7 billion in just over the first two and a half years) to California ($14.7 billion over budget in the first year and a half).
And in every instance, state Medicaid spending skyrockets along with federal costs. For example, in Illinois, estimated state spending on Medicaid expansion from 2017 through 2020 was revised up from $573 million to $2 billion — a more than threefold increase. In Oregon, Medicaid expansion was so costly the state is now considering ending it to fill a $1.6 billion deficit. And in Louisiana, at $13.4 billion for the next year, Medicaid accounts for nearly half of our state budget.
Even worse than the skyrocketing costs are the disappointing health care outcomes. A study published this year in the New England Journal of Medicine reports that Medicaid “expansions were not associated with significant changes” to the health of enrollees and “challenges in access to care persist.”
As Medicaid patients in Louisiana can attest, health insurance is not the same thing as access to quality health care.
Originally created to provide coverage to the most vulnerable patients — such as the elderly, disabled and pregnant women — Medicaid has a history of high costs and poor results. A 2012 Manhattan Institute report, which examined health studies from the previous decade, found that Medicaid patients lack access to basic and specialist health care, and as a result “have the worst health outcomes of any group in America — far worse than those with private insurance and, in some cases, worse than those with no insurance at all.”
And with Gov. Edwards’ Obamacare expansion, most of the new enrollees will be able-bodied, working-age adults who will crowd out the more vulnerable, making it even harder for them to get care in a state in which close to half of doctors weren’t taking on new Medicaid patients just a few years ago.
There’s a better way to lower health care costs than expanding a failed program. Louisiana lawmakers should focus on patient-centered reforms that expand access to health care.
They could start by rolling back overly stringent regulations that limit the supply of medications and health care providers, decreasing access to care, increasing costs and adversely affecting health outcomes.
They also should broaden scope-of-practice laws so nurse practitioners and other health care professionals can treat more patients. And they should encourage innovation by eliminating regulations on things like telemedicine.
Unlike tricky budget gimmicks, these are real reforms that will increase low income families’ access to quality care while truly saving money.
John Kay is the Louisiana state director of Americans for Prosperity.