In Virginia, the debate about expanding Medicaid – the government health insurance program for low-income people – has centered on one thing: money. Proponents argue that because federal tax dollars will fund the lion’s share of the expansion, Virginia could benefit with no additional costs. Meanwhile, opponents argue that ultimately, the commonwealth will pay a high price for expanding a program that already strains the state budget.
Yet the most important reason Virginia – and all 50 states – should reject Medicaid expansion has less to do with costs than it does compassion. Medicaid is a broken program that already disserves 58 million participants nationwide, and Virginia should not relegate more than 400,000 of her own to Medicaid’s poor health outcomes and limited access to care. Virginia could better help those with lower incomes by focusing on bringing down the cost of private insurance premiums. Sadly, expanding Medicaid further would have the opposite effect.
Medicaid is touted as a safety net program, but how safe is it? Medicaid patients are more likely (even more likely than uninsured people) to have late-stage prostate cancer, breast cancer, or melanoma at the time of diagnosis. Other studies show that Medicaid patients fare worse in vascular disease, throat cancer, lung transplants and various other surgeries,
Medicaid participants face bleaker health outcomes in part because they have difficulty accessing primary care. A July 2013 study published in Health Affairs found that nearly a third of primary care physicians were unwilling to take any new Medicaid patients. Even when Medicaid participants can find a doctor, they face longer waiting times. This illustrates the important difference between health “insurance” and access to real health care services.
Proponents of the Medicaid expansion often argue that, while Medicaid’s access to physicians and health outcomes are inferior to private insurance, having Medicaid is better than no insurance at all. This is debatable: studies have reached differing conclusions.
Furthermore, we shouldn’t assume that Medicaid expansion will necessarily decrease the number of people without insurance.
Analysts say that about half of the approximately 425,000 Virginians who would become newly eligible under an expanded Medicaid program are currently uninsured. But evidence from previous state expansions shows no reduction in the rate of uninsured people after an expansion. Arizona, Oregon, Delaware, and Maine have all expanded their Medicaid programs, and the result has been a movement from private insurance to Medicaid. This unequivocally means a movement from better health outcomes to worse.
Furthermore, expanding Medicaid will increase costs for the rest of the population. Ignore for a moment that federal spending on Medicaid and CHIP was $260 billion in FY2012 – before expansion – and that the program already devours 21 percent of Virginia’s state budget.
Medicaid also raises the cost of private insurance. Here’s how:
Medicaid reimburses doctors at a rate far lower than private insurance (about 58 percent), meaning providers must do some serious cost-shifting to recoup the difference. A 2008 study from the consulting group Milliman estimated that privately insured families pay an extra $1800 each year because of underpayment in Medicaid and Medicare.
This makes life harder for families at 139 percent of the federal poverty level (who earn just too much to be newly eligible for Medicaid, but who are now mandated to buy insurance).
As long as Medicaid and other anti-poverty programs exist, there will always be a threshold. But those below and above it would be better off with a health policy that focused on making private health insurance more affordable, rather than regulating some to Medicaid’s poor performance and pushing the cost onto others.
More people become insured when health insurance premiums are lower. But only market forces, not subsidies or government programs like Medicaid, can drive prices down. Less regulation and more competition would also result in better, more efficient use of resources so that people of all income levels could access the care they need.
Medicaid expansion has been advertised as a cost-free, compassionate thing to do for people near the poverty line. In reality, it would raise premiums for privately insured families and could move hundreds of thousands of Virginians into a program with reduced access to care and worse health outcomes.
Virginians should ask themselves: Is that really compassionate?
Hadley Heath is a senior policy analyst for Independent Women’s Voice (iwvoice.org).