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.