I believe Ronald Reagan summed up what we face today way back in 1961. He said, “In 1927 an American socialist, Norman Thomas, six time candidate for president on the Socialist Party ticket, said the American people would never vote for socialism. But he said under the name of liberalism the American people will adopt every fragment of the socialist program. One of the traditional methods of imposing socialism on a people has been by way of medicine. It's very easy to disguise a medical program as a humanitarian project. Most people are a little reluctant to oppose anything that suggests medical care for people who possibly can't afford it.”
Today, our nation and Ohio are experiencing an expansion of government intrusion into our health care industry of unparalleled magnitude. Full implementation of Obamacare will mean about one- sixth of our nation’s total economy will fall under even tighter government regulation and bureaucracy.
My comments in this report are focused on the impacts of expanding the Medicaid program. Contrary to some reports, it is impossible to oppose Obamacare and yet support Medicaid expansion. Medicaid expansion is a major part of Obamacare and represents about half of all Obamacare spending.
In order to understand why Medicaid expansion is bad for Ohio, we need to first understand a few points about the current Medicaid program.
- About two million Ohioans are on the Medicaid program today, or about 20 percent of Ohio’s total population.
- The current program is by far the biggest expense of the state’s budget, consuming about 42% of it, because Medicaid spending increases much faster than inflation. It is crowding out education, infrastructure improvements, prison funding, and other critical needs. The current program, even without expansion, is financially unsustainable
- The program has been in effect for more than 40 years and is designed to care for pregnant women, children and individuals with disabilities of low or no income. Medicaid expansion is designed to a different population, healthy individuals who fall below the poverty line. The largest group in this population is comprised of single young adults with no dependent children. Of course, this begs the question, are we incentivizing people not to work?
Former Speaker of the House Nancy Pelosi is famous for her statement regarding Obamacare, “We have to pass this bill so we can find out what’s in it.” However, I believe one of her even more insightful quotes is, "Think of an economy where people could be an artist or a photographer or a writer without worrying about keeping their day job in order to have health insurance."
Her vision of incentivizing unemployment to create an underclass of starving artists is absurd. However, while operating an employment firm in Ohio for more than 30 years, I can recall numerous occasions where individuals rejected job offers and even promotions in order to retain government benefits. Incentivizing unemployment and underemployment is a real problem with the Medicaid program.
MEDICAID MYTH BUSTING
In an effort to win public support, a number of myths have been perpetrated regarding Medicaid expansion. By contrasting some of these myths with reality I believe a clearer portrait of the effects of Medicaid expansion can be seen.
MYTH #1: “Medicaid offers good health care and expanding Medicaid will save countless lives.”
REALITY: The health outcomes for those our government places on Medicaid are poor and the best research supports this statement. It should not be surprising that Medicaid offers sub-par medical services. Medicaid patients have a significant problem getting access to medical care. One major reason for lack of access is that Medicaid pays doctors only a fraction of what private insurers pay. According to a Heritage Foundation 2012 study, “Medicaid Patients Have Worse Access and Outcomes than the Privately Insured,” Medicaid typically pays physicians only 56% of the amount private insurers pay. Other studies indicate that for a physician in Ohio practicing in an office setting the reimbursement average for Medicaid is even lower.
As a result, many doctors choose not to see Medicaid patients because it is more difficult to keep their practices alive if they do. That, in turn, makes it hard for Medicaid patients to get doctor’s appointments for annual checkups, routine care, and even urgent medical problems. A 2011 study published in the New England Journal of Medicine found that many doctors even refuse to see Medicaid children complaining of seizures, uncontrolled asthma, and even broken arms.
These types of access problems also cause huge overcrowding issues in hospital emergency rooms. Since they have difficulty finding available doctors, Medicaid recipients visit emergency rooms at much higher rates than the uninsured. According a study reported in USA Today, “Uninsured Don’t Go to the ER more than the Insured” by Mary Brophy Marcus, Medicaid recipients visit the ER about twice as much as the uninsured.
After reviewing the research described below I hope each reader will ask a simple question. Is it moral to promote a health program that consumes hundreds of billions of taxpayer dollars, but offers such questionable health outcomes?
University of Virginia Study: A very large study by the University of Virginia found that surgical patients on Medicaid are 13% more likely to die during their hospital stay than those with no insurance coverage and 97% more likely to die than those with private insurance. The Virginia group evaluated 893,658 major surgical operations from the Nationwide Inpatient Sample database from 2003 to 2007. They adjusted the database in order to control for age, gender, income, geographic region, operation, and co-morbid conditions (having 2 or more diseases simultaneously). That way, they corrected for the obvious differences in the patient populations (for example, older and poorer patients being more likely to have ill health).
Oregon Study: The 2008 Medicaid expansion in Oregon based on lottery drawings from a waiting list provided an opportunity to evaluate the health impacts of the expansion. Approximately 2 years after the lottery, data was obtained from 6387 adults who won the lottery and received Medicaid coverage. Data on health outcomes was also collected on 5842 adults who lost the lottery and did not receive Medicaid coverage. This randomized and controlled two year study that was published in the prestigious Harvard School of Public Health showed that Medicaid coverage generated no significant improvements in measured physical health outcomes.
A University of Pennsylvania study published in Cancer found that, in patients undergoing surgery for colon cancer, the mortality rate was 2.8% for Medicaid patients, 2.2% for uninsured patients, and 0.9% for those with private insurance. The rate of surgical complications was highest for Medicaid at 26.7%, as compared to 24.5% for the uninsured and 21.2% for the privately insured.
A Columbia-Cornell study in the Journal of Vascular Surgery examined outcomes for vascular disease. Patients with clogged blood vessels in their legs or clogged carotid arteries (the arteries of the neck that feed the brain) fared worse on Medicaid than did the uninsured; Medicaid patients outperformed the uninsured if they had abdominal aortic aneurysms.
A Harvard Study suggests there are some instances where Medicaid coverage may save lives. The authors compared three states that expanded their Medicaid programs — Maine, Arizona, and New York — with neighboring states that did not — New Hampshire, Nevada and New Mexico, and Pennsylvania. The Medicaid expansion was associated with increased mortality in Maine, and with decreased mortality in Arizona and New York.
While the results suggest Medicaid could be helpful in some instances the study has problems. For example, demographic differences between New York and Pennsylvania could explain the entirety of the “benefit” that the authors ascribed to New York’s Medicaid program. Yet the authors’ conclusion — that Medicaid saves lives — hinges entirely on the comparison of New York with Pennsylvania. Without it, the authors would have shown no difference in outcomes between those with Medicaid and the uninsured, because the results in Maine and Arizona would have canceled each other out.
Another obvious problem with the study is that the Harvard economists looked only at county- level data about mortality and Medicaid; they had to make assumptions about which patients had enrolled in the program, and when. The extensive clinical research showing Medicaid’s poor outcomes, such as the UVA study, has reviewed millions of individual patient records to learn what happened to specific patients with specific forms of health insurance.
MYTH #2: “If we don't expand Medicaid Ohio will lose federal tax dollars that are earmarked for us. It would be foolish of Ohio to turn down all these free federal dollars."
REALITY: There are no federal Medicaid dollars earmarked for Ohio and it is not free money. There is no pot of gold with Ohio's name on it in Washington waiting to be dispersed the day we expand Medicaid. Most of the money we would receive from the federal government by expanding Medicaid would simply increase the national debt. Many members of the Ohio General Assembly are constantly bemoaning excessive and out of control federal spending. This is reasonable given the fact our federal government is currently more than $16 trillion in debt and going deeper in debt every day. Not only do they not have a balanced budget, they don't even have a real budget. To expand Medicaid only makes the hole this nation is digging for our grandkids deeper.
MYTH #3: “The federal government has made some great promises to Ohio in the form of special dollar matches if we expand our Medicaid program. The federal government funds about 62% of Ohio’s current Medicaid program. For the expanded program they have promised to pay 100% of the cost of the program for 3 years and 90% of the cost thereafter. A promise from our federal government is rock solid. They have to live up to their promises; we should trust them and take the deal.”
REALITY: There are no iron clad guarantees in any of the promises offered by the federal government. The federal government can change the Medicaid match amount at any time. To accept Medicaid expansion means Ohio is trusting its financial future to a government that is deeply in debt and addicted to over spending. The calls for a balanced federal budget and entitlement cuts should send a chilling message to those that would support the expansion. Also, we must consider potential changes caused by future administrations. Remember Medicaid is not a road project, or some other short term building project. No one foresees an end date for Medicaid. Whatever budget sources we use to fund the program must be deep, dependable and wide. The current program is growing so rapidly that its cost is often described as unsustainable. Expanding the program now by signing on hundreds of thousands of new participants would be irresponsible. Perhaps the old saying, "today's promises are tomorrows taxes" applies in this case as new revenue would have to be found to sustain the program at some point in the future. In any case the long term commitments required to make this deal even somewhat financially feasible are very dubious.
MYTH 4: “If the expansion program doesn’t work then we’ll just shut it down and walk away.”
REALITY: We could probably argue all day about how Health and Human Services, the courts, a future Governor, a future President, a future Secretary of Health and Human Services, etc., might interpret the law. Most of the “experts” seem to agree that once a state accepts the federal offer and expands Medicaid there is no easy withdraw from the expansion portions of the program. However, I believe the legal argument is a moot point. The reality is that Ohio would simply not drop hundreds of thousands of voting citizens from a Medicaid program. We do not have the political will to do such a thing. Just consider the political pressure being applied today for expanding the program and then consider how much greater that pressure would be if the subject of the discussion was one of taking it away.
MYTH 5: “We will use the expansion of Medicaid as an opportunity to reform the program.”
REALITY: It defies logic to expand a government program that needs to be reformed. If we can meaningfully reform Medicaid we should start with the existing program. After the reforms are in place and operating effectively then, and only then, should we consider expansion.
CONCLUSION: Regardless of the sweeping rhetoric and marketing techniques used by those that support Medicaid expansion the science to support claims of significant improvements in public health are not supported by the facts. How many lives and families could be saved by leaving these billions of dollars in the private sector to create jobs and expand our economy, as opposed to burdening the nation with more debt and bigger government in order to expand a very questionable, if not failed, government program?