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Steve Anderson: Count the cost of Medicaid expansion

  • Published Thursday, March 13, 2014, at 12 a.m.

There’s no such thing as “free money,” right? Those who support Obamacare’s expansion of Medicaid in Kansas think there is. According to them, expansion will expand coverage at no cost to taxpayers.

It’s too good to be true. If Kansas expands Medicaid under Obamacare, we’ll actually find that these promises can’t possibly be delivered – and both Medicaid recipients and the middle class will pay the price.

Using an analysis model pioneered by other states, I estimate that Medicaid expansion will cost Kansas taxpayers between $822 million and $1.39 billion over the next decade. But even those amounts may be low. President Obama has begun to waffle on the promise to pay even the current funding level and has begun to talk about “blended rates.”

The Legislature inevitably will be faced with two choices if it accepts expansion: Slash Medicaid payments for services, or throw more money at it. Medicaid is already starting to crowd out funding for schools. In just four years the state portion of the payment for Medicaid has increased by 49 percent – making it the fastest-growing major budget item.

What will the taxpayers get for their dollars? The statistics on Medicaid’s quality and ability to improve health outcomes are stark: Recipients fare poorly on medical access and outcomes, access to doctors and specialists is significantly lower than for those with private insurance, the death rate in hospitals after surgery is twice as high, and children on Medicaid have a higher chance of being turned away at a health care provider’s door.

Medicaid’s moral failings should be enough to end the expansion debate once and for all. But just in case, Medicaid expansion is also an expensive endeavor that will force the state to cut funding from other important areas of the state budget.

And if the president’s funding promise doesn’t pan out, the state will still have to find the money to fund expansion. Should we cut education funding? Reduce public-safety funding?

That leaves Obamacare’s Medicaid expansion with no leg to stand on, either financial or moral. It will harm the Kansans it’s supposed to help, add billions of dollars to the state’s budget, and force the state to cut valuable programs that serve our children.

If that’s what “free money” costs, then Kansas should pass.

Steve Anderson, who served as Kansas’ budget director from 2010 to 2013, is a fiscal policy fellow at the Kansas Policy Institute.

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