Medicaid expansion is a disaster
Those wishing to expand Medicaid under Obamacare in Nebraska are working double time. After coming up short in the legislature, supporters are now eyeing a ballot initiative on the November ballot.
But before going down this path, Nebraskans should know every state that expanded Medicaid has created an unsustainable burden on taxpayers and crowded out resources for the truly needy.
Why on earth would we want to follow in their footsteps?
In state-after-state where Medicaid expanded enrollment spending has far outpaced estimates. In other words: more people have signed-up than the states budgeted for. As a result, states are left scrambling for ways to cover budget shortfalls while still paying for other essential community services like education and public safety. Left with few options, some have had to raise taxes or impose higher fees on service providers to help cover the cost, which inevitably are passed along to consumers as rate increases.
And the situation will only get worse. In 2018 the federal government will pick up 94 percent of the cost of Medicaid expansion, but that quickly drops down to 90 percent in 2020.
One of the first states to experience Medicaid expansion woes was Oregon. In 2012, the
Beaver State announced it would expand Medicaid under the new Obamacare rules to cover able-bodied adults with no children. Four years later, the state was scrambling to come up with the $328 million to pay for the expansion.
Ohio’s story is similar. Despite strong opposition from the state legislature, Gov. John Kasich muscled through a Medicaid expansion plan, predicting only about 365,000 new enrollees would sign up in the first year. The governor was way off.
In fact, the program exceeded that projection in just its first seven months and by 2016 there were 650,000 able-bodied enrolled at a cost of $406 million a year. For context, that’s more than what Ohio was spending in the 2015 fiscal year on criminal justice and higher education combined. By the time Ohio had worked up its 2016-2017 budget, Medicaid was consuming more than half of Ohio’s entire general operating fund.
If this happened in Ohio, Oregon, and elsewhere, what makes us think it would be any different here?
Medicaid expansion would almost certainly lead to higher taxes to cover the inevitable costs. As it is, we face some of the most burdensome property taxes in the nation. According to the Tax Foundation, Nebraska has the 12th highest property taxes per capita in the United States; and Medicaid expansion could lead to higher local government costs.
The concern goes far beyond money. Besides being expensive, Medicaid is a lousy way to deliver health care.
Adding able-bodied adults to the Medicaid population crowds out services for the needy and the disabled – precisely the folks Medicaid was intended to help in the first place. The Foundation for Government Accountability estimates that 650,000 truly needy individuals find themselves on waiting lists while a staggering 28 million able-bodied adults are enrolled to receive care.
There is a better way. Instead of expanding Medicaid wholesale, policymakers could lift unnecessary regulations that drive up health care costs.
Nebraska is one of a handful of states that has scope-of-practice laws that determine what tasks nurse practitioners and other medical professionals are able to perform when caring for a patient. This is particularly problematic for rural states like ours, where patients sometimes have to drive much farther to see a doctor to receive the care they need.
Loosening some of these restrictions could free up critical dollars in the budget while expanding access for lower-income individuals. According to a study published in Health Affairs, if all states allowed nurse practitioners to practice without physician oversight, it would save $810 million.
On paper, Medicaid expansion under Obamacare looks like a good deal but in practice, it’s a disaster. Nebraskans want and deserve tax relief, not policies that have the potential to increase the tax burden. Let’s learn from the mistakes made by places like Oregon and Ohio and say “No” to expanding Medicaid.
— Jessica Shelburn is the Nebraska state director at Americans for Prosperity.