Although it might not have intended to do so, the Republican-controlled state Senate Finance Committee may have put Democrat Gov.-elect John Bel Edwards in a troublesome position on the issue of Medicaid expansion.
Candidate Edwards most aggressively sought Louisiana accepting expansion. During the campaign, he often misled the public by implying that not expanding Medicaid allowed $1.6 billion in federal dollars to leave the state. In reality, this amount depends upon choices made by other states and has nothing to do with any Louisiana decision. Less bombastically, Edwards said it would bring in more money than it cost during the 2016-2019 term, neglecting to reveal that the total extra cost to the state would exceed $2 billion through 2023.
But the Legislative Fiscal office recently noted that the enabling instrument through which Edwards intended expansion before April 1, 2016, would “save” little or nothing. Subsequently, the committee commissioned the Department of Health and Hospitals to broaden and update the past study that had calculated the huge future state cost.
Study results probably will put more political pressure on Edwards to back off expansion because it will expose as a myth many claims commonly made by expansion supporters. Examples follow.
Myth: Other states report positive experiences with expansion.
Fact: A number of states have realized they overestimated Medicaid expansion’s benefits and badly underestimated the costs. As a result, Arkansas will exit expansion completely by the end of 2016 and wants to replace it with something notably divergent from current practice. The proposed Arkansas alternatives are unlikely to win favor from the ideologically rigid Obama administration, and that will probably force Arkansas to continue expansion unchanged against its will. Kentucky elected a Republican governor promising to undo expansion. Forecasted costs had doubled, and the state lost health care jobs after his Democrat predecessor claimed such jobs would increase with expansion.
Myth : Cuts to hospital funding for uncompensated care force Louisiana to recoup these dollars through expansion.
Fact: Congress repeatedly has postponed cuts, and none might ever occur. Many states that expanded Medicaid found that recipients’ emergency room use rose with expansion and so successfully lobbied the federal government to delay these planned reductions to hospital funding. This happened as new enrollees swamped the relatively declining number of Medicaid providers, making more people than ever unable to receive timely primary care. Only the more expensive option of raising provider rates would reduce Medicaid ER usage.
Myth: Expansion provides health care to the needy, leading to better health and savings.
Fact: See above. Without access, insurance does not advance care. And a number of studies confirm that, in the aggregate, on health outcomes Medicaid recipients report no better, if not worse, results than does the comparable uninsured population because of the lower quality of care distributed. Only raising rates could entice better provision. Regardless, the added expense of expansion probably would crowd out funding for service provision to the most vulnerable Medicaid recipients such as the disabled.
These real-world data suggest DHH will report even higher costs over the next decade than before with potentially no “savings” even in the initial fiscal year. This would put Edwards in a bind, for he cannot justify expansion on a financial basis if within a decade it will add annually hundreds of millions of dollars in costs. Neither can he justify it on moral grounds, for it promises something it cannot deliver with cost pressures causing deprivation of needed care.
Edwards then must choose whether to act in Louisiana’s interests by refusing expansion or to follow through on his promise to special interests by imposing huge costs on taxpayers that bring no real health benefits. Putting ideology before people sets the wrong tone to begin his term.
Jeff Sadow is an associate professor of political of political science at Louisiana State University Shreveport, where he teaches Louisiana Government. He is author of a blog about Louisiana politics (http://www.between-lines.com) and, when the Louisiana Legislature is in session, another about legislation in it (http://www.laleglog.com). Follow him on Twitter, @jsadowadvocate. Write to him at firstname.lastname@example.org. His views do not necessarily express those of his employer.