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Huge cost would come with Kansas Medicaid expansion

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Conspicuously absent from most commentary arguing that Kansas should expand Medicaid under the Affordable Care Act is any discussion about the program actually improving the health of recipients. Instead, we are left with terribly materialistic arguments about forgone federal money. Why is it that on the biggest policy questions facing Kansas, such as Medicaid or education, we hear lots about money spent and little about health outcomes or student achievement?

Studying a pre-Obamacare Medicaid expansion in Oregon, researchers at Harvard and the Massachusetts Institute of Technology identified some troubling findings on actual health outcomes. Because more people applied for the program than there were available spots, a unique opportunity for evaluation was created with control and variable groups. The findings are disconcerting. Overall emergency room visits jumped by 40 percent for new Medicaid recipients to go with an 18-percent increase in non-emergency ER visits. Researchers also found no improvement on key metrics such as blood pressure, cholesterol and certain blood sugar markers when comparing the individuals added to the Medicaid rolls versus those who were not.

In short, Oregon spent significantly more money on a health program that did not improve health.

America has “50 laboratories of democracy” and there are lessons to be gleaned from other Medicaid expansions. According to the Foundation for Government Accountability, Kentucky expanded Medicaid and saw the program go $3.3 billion over budget in almost three years. Ohio, $4.7 billion. Illinois $2 billion. New Mexico $560 million. For Kansas estimates, and given the example of other states, the Kansas Health Institute’s estimate of a $1.1 billion increase in spending over 10 years seems to be low.

Those numbers also include a generous guarantee of continued federal largesse. Throughout the Obama Administration, the president’s bean counters floated the idea of lowering their promises of continued Medicaid dollars. Congress’ recent, and failed, dealings with Obamacare also lowered support to states, meaning Kansas will suffer more fiscal trouble when the federal well runs dry.

This represents a real impact on state spending. The Obama Administration’s Centers for Medicare and Medicaid Services acknowledged this in 2016: “Medicaid constitutes a significant portion of spending by both Federal and State governments…A growing share of budget expenditures on the Medicaid program could displace spending on other important programs, or additional taxes or other revenue sources could be required to fund Medicaid.”

Lastly, federal money is not “free.” Medicaid expansion money represents new federal borrowing and will be paid directly by you and me with interest in the form of higher federal taxes. D.C. takes a cut and returns a portion with lots of nifty strings attached.

Expanding Medicaid would give government health benefits to working-aged, able-bodied adults and almost certainly mandate tax hikes or lower spending on priorities such as K-12 spending. What’s more, the promise of federal money is likely to ring hollow. To finish where we started, the best research also suggests Medicaid expansion is not likely to improve the health of Kansans.

James Franko is vice president and policy director at the Kansas Policy Institute.

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