My Turn: Medicaid expansion flaws are glaring

For the Monitor
Last modified: 1/28/2016 3:15:07 AM
This year, the state Legislature will decide the future of expanding the state’s Medicaid program to able-bodied adults under Obamacare. Medicaid expansion – passed in 2014 by a Legislature more sympathetic to Obamacare and growing government – expires later this year, and some of our elected officials are seeking to make it permanent.

In early 2013, when Obamacare proponents pursued adding able-bodied adults to the Medicaid program, they offered three reasons for adding thousands of individuals to a program that is already the largest in state government. All three premises have proven to be false.

First, expansion supporters argued that adding people to Medicaid would improve their health. Then, a Harvard/MIT study showed no discernible improvement in physical health for those on Medicaid versus the uninsured, and the expansion proponents quickly dropped that argument.

Next, Obamacare fans argued that uncompensated care (indigent health services without repayment) represented a “hidden tax” on health insurance consumers and that Medicaid expansion would cover these costs and lower health insurance rates for everyone. However, after spending hundreds of millions of taxpayer dollars on new Medicaid recipients, analysis by the Robert Wood Johnson Foundation and Freedom Partners Chamber of Commerce shows that premiums still went up between 7.5-8 percent this year.

Finally, Medicaid expansion supporters suggested that giving able-bodied adults Medicaid coverage would cause them to stop using the emergency room for care. In reality, a New Hampshire Hospital Association report showed ER usage spiked after Medicaid was expanded.

Despite their abysmal track record, Obamacare supporters are working to sell the state Legislature on making Medicaid expansion permanent. But doing so would not be a responsible solution for New Hampshire’s poor, nor the state’s taxpayers at-large.

As the nation learned with welfare reform in 1996, and New Hampshire saw reforming its cash assistance (TANF) program in 2006, the success of any welfare program for able-bodied adults – including Medicaid – depends on its ability to move people off the rolls into self-sufficiency.

At the state and federal level, this was achieved through strong work requirements in order to receive and maintain benefits. These changes dropped welfare rolls remarkably and moved thousands of Granite Staters off government dependency – allowing them the dignity of earned success and saving taxpayers millions.

Despite this critical lesson learned, Medicaid expansion gives recipients taxpayer-funded benefits without requiring them to work, get job training or even actively seek work. While getting good data from New Hampshire’s program is a major challenge, a recent study by the Stephen Group in Arkansas – the model-state for New Hampshire’s Medicaid expansion – showed that 40 percent of able-bodied Medicaid expansion recipients have an income of $0, meaning they aren’t working at all.

At a time when the Granite State’s unemployment is at 3 percent and “Help Wanted” signs are everywhere, every welfare program should expect able-bodied adults to commit to working. Medicaid expansion fails this critical test, and even discourages individuals from working more hours or finding a better job for fear of losing these benefits.

Beyond that, Medicaid expansion drives up the cost of health insurance for the self-employed and those whose employers don’t offer coverage. That’s because, according to the Stephen Group’s study of the model New Hampshire borrowed from Arkansas, Medicaid recipients cost more to insure than others who, under Obamacare, are forced to buy their policies on the exchange, where the state has placed higher-cost Medicaid recipients. Thus, tens of thousands of hard-working Granite Staters subsidize the costs of able-bodied adults on Medicaid.

The reason why Medicaid recipients are more expensive to insure is that they don’t have the same incentives to use health care resources appropriately that those who pay for their insurance do. While most avoid the ER because of a $250 co-payment, there are no, or minimal, co-pays in Medicaid, and there are no consequences if they aren’t paid. Thus, recipients often use the easiest, not the most efficient, care possible.

This is an obvious shortcoming of a broken Medicaid program.

It’s time for legislators to acknowledge that the flaws in Medicaid expansion go far beyond the state cost. It’s time to pull the curtain on this relic of a disastrous Obamacare law for good.

(Greg Moore is the state director for Americans for Prosperity-New Hampshire. He has served formerly as the chief of staff and policy director for the New Hampshire House of Representatives, a director for the New Hampshire Department of Health and Human Services and as a consultant for Medicaid reform projects across the country.)

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