Medicaid Expansion

Reject Medicaid Expansion

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The Maine Heritage Policy Center (MHPC) released its newest original research report, Reject Medicaid Expansion, on Monday morning during a press conference at the Holiday Inn in Portland. The report highlights the harmful consequences of expanding Medicaid eligibility under the Affordable Care Act (ACA), also known as ObamaCare, which will cost Maine taxpayers $400 million over the next five years and jeopardize care for Maine’s truly neediest citizens.

When Maine expanded its Medicaid program in 2002 under then-Governor Angus King, expansion proponents made many beneficial claims about the effect it would have on the state. MHPC tested these claims by drawing on data from the previous expansion, as well as data from states who have expanded eligibility under the ACA, to determine that these beneficial claims to not withstand factual scrutiny.

Proponents claimed in 2002 that expansion would provide a “huge boost” to Maine’s economy. However, after Maine expanded eligibility, the rate of Maine’s GDP growth rate slowed by nearly one-third in comparison to pre-expansion numbers.

Proponents also claimed that expansion would reduce Maine’s uninsured rate. Between 2000 and 2010, Maine’s uninsured rate hovered around 12 percent, showing that expansion had relatively no impact on the number of uninsured Mainers.

Further, it was asserted in 2002 that the program would only enroll an additional 11,000 people. However, within 14 months after expansion, enrollment had grown to 17,000, and soon the program had to be capped after reaching 25,000 new enrollees.

This is exactly what would happen if Maine were to expand again at the ballot box in November, costing Maine taxpayers millions of dollars. This time, proponents claim that Medicaid expansion would only enroll an additional 70,000 Mainers, but that number is not rooted in reality. These estimates look only at the current number of uninsured citizens who fall within the artificial income threshold established by the program.

The truth is that well over 100,000 Mainers would eventually enroll, causing massive overruns that would devastate our state budget. This is because the estimated figure of 70,000 does not include those who are currently eligible but not enrolled in Medicaid, nor does it consider the number of privately insured Mainers within the income threshold who would switch to public coverage once it’s available rather than pay for healthcare at their own expense.

Those who are currently eligible but not enrolled will cost the state approximately $50 million, as funds distributed to Maine under ACA expansion would go only toward those who fit within the ACA’s eligibility requirements – 21 to 64 year-old able-bodied, childless adults making up to 138 percent of the federal poverty line. The federal government has promised to pay for 90 percent of the cost to insure these new enrollees.

The federal government pays only 64 cents of every dollar spent on traditional Medicaid enrollees, which is how the funding scheme would be structured for those previously eligible who finally enroll after ACA expansion. This influx of new enrollees, tens of thousands over the proponents’ estimates, leads to massive overruns that put unbearable fiscal strain on state budgets.

This is what has been seen in expansion states across the country. Within two years of expansion, California had a 222 percent budget overrun amounting to $14.7 billion. Kentucky had a $3 billion overrun within three years of expansion, and Ohio saw a $4.7 billion overrun, 87 percent more than what proponents claimed expansion would cost.

These cost overruns will jeopardize care for the truly needy, which is already being seen in expansion states. Because individual states get more money from the federal government for covering able-bodied adults than they do for covering traditional Medicaid enrollees, as budgets tighten from the influx of enrollees, state legislatures are voting to reduce care for traditional program enrollees.

Alaska, Arizona and Arkansas have all cut services for traditional Medicaid enrollees with developmental disabilities in order to keep their state budgets afloat. Maine should not be caring for able-bodied, childless adults over those with real disabilities that prevent them from procuring their own insurance.

Finally, the report finds that Medicaid expansion would cost Maine $400 million over the next five years, and by 2022, Maine taxpayers would foot the bill for at least $100 million in annual to provide coverage for able-bodied, childless adults.

In summation, the Reject Medicaid Expansion report makes clear that expansion in Maine would be unaffordable, unfair and unpredictable for Maine taxpayers.

The full report can be viewed viewed here.

About Jacob Posik

Jacob Posik, of Turner, is a policy analyst for the Maine Heritage Policy Center. He can be reached at jposik@mainepolicy.org.

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