Tag Archives: Medicaid expansion

Jim Demint is correct, Medicaid expansion does hurt everyone and John Kasich is a liar.

On March 18, 2015 former U.S. Senator and president of the Heritage Foundation​, Jim DeMint wrote a great piece on Medicaid expansion entitled Why state Medicaid expansion hurts everyone. ​I can only find one fault with it. The term “bump out Medicaid payment” should have been explained in the piece or at least an asterisk provided with an explanation at the end. Often times further explanation is not given due to the number of words the author can use being constrained. Since there are no such constraints on me, I will provide that explanation and add further context below.

Bump out Medicaid payment” refers to the end of the PPACA (Obamacare) mandated increase in reimbursements (pay) to primary care physicians who accept Medicaid. Under the PPACA, physicians who accept MediCAID were to receive an increase in reimbursements commensurate to what physicians who accept MediCARE get, which is a significantly higher. That sounds great right? That means Medicaid recipients will have access to more physicians! This would normally be a good thing, at least for the most vulnerable in our society. Only one problem, and it’s a BIG one.

The Federal government only pays for the first TWO YEARS of this increased reimbursement. After two years, STATE governments will struggle to maintain this increased rate of pay. Why is this an issue now? Because the first two years of this temporary provision were 2013 and 2014. That means state taxpayers are facing the reality of maintaining that increased rate of pay right now. In 24 states, like Illinois there is NO MONEY to maintain this pay hike for primary care physicians who accept Medicaid. Those states have already decided NOT to continue funding this increase in Medicaid primary care physician payments with state taxpayer dollars.  Many of the physicians who received this temporary pay hike have already expanded their patient lists to include many of these new Medicaid recipients. If the state cannot maintain the new increased rate of pay these new patients will most likely end up right where they were before, struggling to find a doctor who accepts Medicaid.

Worse YET, because far too many states expanded Medicaid eligibility to 138% above the FPL – Federal Poverty Level – and because the PPACA expands Medicaid to SINGLE, childless adults in the prime of their lives. The truly indigent and disabled end up disenfranchised due to the fact that single, childless adults in the prime of their lives (who should be WORKING) are now COMPETING for those Medicaid dollars. This in turn makes it more difficult for those who Medicaid was originally designed for (disabled, blind, single mothers, etc.) to receive the care they often times desperately need. Oh and let’s not forget that Medicaid recipients are also now competing with JAILED PRISONERS and ex convicts in Illinois, Ohio and other states thanks to PPACA Medicaid expansion.

ANOTHER MEDICAID TICKING TIME BOMB

There’s another ticking fiscal Medicaid time bomb, not referred to in Demint’s article that begins next year in 2016. For states that implement Medicaid expansion, the federal government will finance 100% of ALL costs (not just primary care visits) of those made newly eligible for Medicaid from 2014 to 2016. Then in 2016 the fed begins ‘phasing down’ that reimbursement to only 90% by 2020 and beyond. States will once again have to struggle to continue to pay the traditional Medicaid match rate for increased participation among those currently eligible. In addition to those costs are the administrative costs to the state. These are estimated to cost an ADDITIONAL $12 BILLION by 2020. This is why states like Texas which faced a $25 BILLION budget deficit in 2010 opted out of PPACA Medicaid expansion, prompting then governor Rick Perry to write this letter to then Secretary of HHS Kathleen Sebellius. Governor Perry was right then and he’s right now. Obamacare Medicaid expansion is a bad deal for states and a very bad deal for the most vulnerable in our society.

Illinois took the opposite role under former Governor Pat Quinn. He expanded Medicaid under the PPACA in the summer of 2013. A document sent by Quinn’s office over the summer of 2014 to the federal government significantly raised the per-person estimated Medicaid cost, INCREASING the state’s total outlay to $2 BILLION, using 2014 enrollment numbers. That is more than more than THREE TIMES the original cost estimate. Illinois has budgeted about $20 billion in 2015 for its Medicaid program. About half will be reimbursed with federal funds.

This shortsighted decision by former Governor Quinn has played a significant role in the current $9 BILLION budget DEFICIT that new governor Bruce Rauner now has to deal with. He is doing so by making deep and necessary cuts across the board. Much to the chagrin of the hospital lobby which seeks to maintain status quo by tapping into more federal dollars, regardless of the impact on our state’s budget.

A MESSAGE TO OHIO’s GOVERNOR JOHN KASICH

Let me address faux ‘Conservative’ governor John Kasich who Senator Demint accurately states is ALREADY facing a Medicaid expansion program 53% OVER budget and that’s just for the first HALF of 2015!

Mr. Kasich you have LIED to your constituents over and over again making public statements like the following:
“[Rejecting Medicaid expansion] takes $13 billion of Ohioans’ federal tax dollars out of our state and gives it to other states, —where it will go to work helping to rev up some other state’s economy instead of Ohio’’s.”  The worst part sir is that you KNOW it’s a lie. You are NOT an economic illiterate. You served as a member of the United States Congress for 18 years as the CHAIRMAN of the House BUDGET Committee!

The truth was revealed by Nic Horton, Jonathan Ingram and Josh Archambault. In a recent article at Forbes, these gentlemen pointed to a recent report from the Congressional Research Service which CONFIRMS what many of us policy experts have known for a long time. States that reject Obamacare’s Medicaid expansion are NOT “sending that Medicaid expansion money to other states“. Instead, that money is simply NEVER spent.

Nice try Governor. Next time just admit you’re a big government Statist who seeks to use taxpayer dollars to make you and your state’s budget look better, regardless of the additional burden that places on other taxpayers, their children and their grandchildren. But hey, you know what they say Governor. When you rob Peter to pay Paul you can ALWAYS count on Paul’s vote. Shame on you sir. You and those like you give Republicans a bad name.

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The unsustainable cost of Obamacare in Illinois.

The state of Illinois would like to thank the other 49 states for their massive, forcibly redistributed financial contribution towards the anticipated cost to cover Illinois’ projected Obamacare implementation and first year operating costs (January 1, 2012-December 31, 2014) of $135 million. Thus far…

$115 million has been received for the Illinois Obamacare exchange “Marketing, Outreach and Information Technology”, of which:

$28 million went to 44 “community groups” in Illinois that will be conducting “outreach” providing “education” and facilitating enrollment in the Illinois Obamacare Exchange through the IPA – In Person Assister – program.

$35 million went to PR firm Fleishman Hillard to market and promote the Illinois Obamacare Exchange. The firm, along with several partners, will lead a massive multimedia outreach and advertising campaign to promote enrollment in the Illinois Obamacare Exchange.

$66.5 million went to a CANADIAN firm known as CGI Technologies and Solutions who will be responsible for setting up and maintaining the Illinois Obamacare Exchange which will also interface with Illinois’ eligibility system for Medicaid. Because you know, we’re adding an estimated 700,000 people onto our already bankrupt Illinois Medicaid program.

This Medicaid expansion will cost the taxpayers of Illinois:

$179,758,409 (that we do not have) in 2017
$227,311,277 (that we do not have) in 2018
$278,731,610 (that we do not have) in 2019
$417,523,899 (that we do not have) in 2020

Whether you use the Kaiser Family Foundation estimates, the Cato Institute estimates or the Congressional Budget Office. The expansion of Medicaid under Obamacare will put a significant new burden on the taxpayer. This is because Obamacare promises 100% matching federal Medicaid dollars for years 2014 through 2016 and 90% for years 2020 onward for states that elect to expand their Medicaid rolls. Even President Obama’s Medicare Actuary Charles Blahous doubts that promise. Most especially since the President’s own submitted budgets, as well as the bipartisan Simpson–Bowles Commission, and the budget resolution passed by the House of Representatives in 2012 already call for trimming Medicaid spending by a minimum of $100 billion.

Old Medicaid ‘eligibles’ and new Medicaid ‘eligibles’

Whilst the Obama administration touts the fact that Obamacare calls for the aforementioned matching federal funding for those who will be newly eligible for Medicaid in 2014. It is far less vocal about the fact that it only provides the existing or Traditional FMAP percentage match rate for the millions of Americans who were always eligible for Medicaid but either never knew they were or never bothered to enroll. These ‘old eligibles’ will now be required by federal law to maintain ‘minimum essential coverage‘ via Medicaid. Which means the vast majority of them will be enrolling in 2014 in order to avoid problems with the IRS. How much will the Traditional FMAP federal percentage match be in 2014? In states like Illinois and others it will be only 50%.

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Who picks up the other half? That’s right, the state tax payer. Keep in mind Illinois taxpayers that this new tax increase will be in addition to the 66.66% tax increase Governor Quinn already imposed upon you in January 2011 and the $350 million additional tax increase in May 2012. How much will picking up the other half of the cost to enroll ‘old eligibles’ (‘woodwork’ population) and the cost of enrolling ‘new eligibles’ cost Illinois taxpayers? See chart below. Look at CATO’s estimate of $10.1 billion.

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The Obamacare ‘fix’ to Medicaid reimbursement rates to doctors.

Another state budget buster will be the Obamacare ‘fix’ to Medicaid reimbursement levels to doctors. You see the PPACA’s answer to improving Medicaid is to raise the amount the federal government pays to doctors who take MedicAID patients to a level commensurate to what the federal government pays to doctors who take MediCARE patients. Their thought process behind doing so is that more doctors will accept Medicaid under this arrangement because the reimbursement rate will be far higher. There’s only one problem. The federal government only provides funding for this massive increase in Medicaid reimbursement ratios for the first 2 years. Afterward, state tax payers are on the hook for the rest.

This, more than anything else related to Medicaid expansion is a fiscal ticking time bomb for state budgets and one that is not being discussed nearly enough. Furthermore, just wait until hospitals – who are forced to treat emergency patients under EMTALA – start pressuring states for reimbursement of more than $11 billion in annual federal payment cuts for uncompensated care. Hospitals are a powerful lobbying force and they will lobby hard for that money.

The Illinois Policy Institute predicts that 1 in 3 Illinois residents will be Medicaid recipients by 2019. And, on January 30, 2012, the Civic Federation released its “Budget Roadmap” for the coming fiscal year. In it, they highlight the fact that state officials now believe that the Illinois Medicaid program will have between $21 and $23 billion in UNPAID bills by 2017. ‘Forward’…. to bankruptcy.

Medicaid is a dangerous government welfare program

The worst part about this expensive expansion of Medicaid is that according to multiple studies completed by Johns Hopkins, the Journal of the National Cancer Institute, Columbia-Cornell, the University of Pennsylvania, the University of Pittsburgh, the American Academy of Cardiology and the New England Journal of Medicine, Medicaid patients in bankrupt states like Illinois & California wait twice as long to see a doctor or specialist as those with private health insurance. And, often times they are denied the care they need.

And, Medicaid surgical patients have far worse health outcomes than those with private insurance. In fact, in the largest study of it’s kind (with nearly 1,000,000 participants) the University of Virginia found that Medicaid surgical patients are 97% more like to DIE than surgical patients with private health insurance.

A better way “forward”

There are intelligent alternatives to simply flooding our bankrupt Medicaid rolls with 17 million more Americans. In fact, these alternatives have already been proven successful in states like Florida, Indiana and Louisiana. Sadly, our Democrat Governor Pat Quinn and even Republican governors like Arizona’s Jan Brewer and Ohio’s John Kasich haven’t learned a thing from these successful reforms. Instead, they have chosen to double down on failure by expanding Medicaid to historic proportions. Worse yet, they want you to pay for their wrong headed decisions via higher taxes and more ‘cost shifting‘. Both of which will do nothing but continue to increase the cost of health insurance for everyone else.

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