While Members of Congress are arguing about defunding parts of Obamacare, the rubber is meeting the road in the states. Governors and state legislatures are sweating decisions about setting up government health care exchanges and expanding the Medicaid program.
While the offer of additional federal money for Medicaid is tempting for many governors and legislatures, it is a trap. And it is just one of the reasons Obamacare doesn’t work.
The Medicaid expansion is a crucial part of Obamacare that is supposed reduce the number of uninsured. But adding millions of people onto an already strained program doesn’t help anyone. The Medicaid program is already struggling to provide care to its core obligations—a diverse group of low-income children, disabled people, pregnant women, and seniors. So dumping more people into the program will make matters worse. Research shows that Medicaid enrollees already have worse access and outcomes than privately insured individuals.
This will have real effects on America’s needy, including children. Dr. Hal Scherz has seen the problems Medicaid creates firsthand. He practices in the only pediatric urology group in the state of Georgia, and more than half of his practice is made up of Medicaid patients.
But Medicaid already doesn’t cover the costs of many procedures, and expanding the program is only going to stretch the doctors’ even further—while they get paid less. It is unlikely that care providers like Dr. Scherz will be able to keep treating such high numbers of Medicaid patients under this scenario—which means less access to care for children who need it.
Thankfully, Georgia is not expanding Medicaid right now. But that doesn’t mean Medicaid is doing well, even in states that aren’t expanding. Due in part to low reimbursement, one in three doctors already refuses to accept new Medicaid patients.
Medicaid is a problem for patients—and it’s also a major problem for states that are struggling financially. As Heritage’s Nina Owcharenko explains:
Today, Medicaid consumes over 23 percent of state budgets, surpassing education as the largest state budget item. As Medicaid spending continues to rise, other important state priorities such as education, emergency services, transportation, and criminal justice are squeezed.
In fact, 40 out of the 50 states are projected to see higher costs—not savings—from expanding Medicaid.
Medicaid needs serious reforms to serve the people it was intended to serve. Expanding it under Obamacare is not the answer.