Medicaid Expansion

Maine cannot afford another Medicaid expansion

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Maine voters will decide tomorrow at the ballot box whether to expand Medicaid coverage to childless, able-bodied working age adults who earn up to 138 percent of the federal poverty level (FPL). Luckily, Maine’s past experience with Medicaid expansion provides us with all the evidence we need to reject expansion once more.

Leading up to Election Day, proponents of expansion have been using the same worn out talking points they used back in 2002, when Maine expanded Medicaid to those earning up to 125 percent of the FPL. For months now, they’ve been telling you that expansion will be a huge boost to Maine’s economy and create jobs. They’ve told you it will save lives, end the opioid epidemic, reduce the uninsured rate and end uncompensated care.

None of it is true.

When Maine expanded back in 2002, the growth rate of Maine’s gross domestic product declined by one-third. Instead of creating thousands of new jobs, hospitals began laying off workers as they racked up a $750 million debt.

Expansion did not save lives either. A study done by the New England Journal of Medicine shows that when Maine expanded back in 2002, our mortality rate did not measurably decline in comparison to New Hampshire, a state that had not yet expanded Medicaid eligibility. In fact, other studies have shown that mortality rates in expansion states are up by 9 per 100,000 compared to non-expansion states. The claim that expansion “saves lives” is crude, unscientific and has been debunked more than once.

Additionally, when Maine last expanded, our uninsured rate did not decline, nor did uncompensated care, or charity care, at Maine hospitals. Despite promises that expansion would decrease the number of uninsured Mainers, the rate remained flat even eight years after expansion.

This is due to a phenomenon called crowd out. Crowd out is when the privately insured switch to public health options once eligibility rules widen. Instead of insuring the population expansion was intended to cover, thousands of Mainers switched from private plans to the public option, causing enrollment and program costs to skyrocket. Prior to expansion, the share of Mainers enrolled in private insurance was roughly 70 percent, and the share of those on Medicaid was about 14 percent. After expansion, private insurance enrollment dropped to 61 percent, and the share of Mainers enrolled in Medicaid increased to 25 percent.

Expansion enrollment, which was initially project to be around 11,000 new Mainers, quickly grew to 17,000 within 14 months, and the program was eventually capped at 25,000. Meanwhile, thousands of Mainers continued to seek care without insurance, causing costs to shift to the privately insured as charity care quadrupled at Maine hospitals.

Finally, expanding Medicaid will not end Maine’s opioid epidemic, nor will it measurably improve our ability to combat the crisis. The Center for Disease Control and Prevention has done multiple state level studies that show Medicaid recipients are more likely to be prescribed opioids than those on private insurance, and they’re also more likely to die from an opioid related death than the privately insured. Further, CDC data shows that expansion states continue to see higher age adjusted rates of opioid related deaths than non-expansion states.

Proponents insist that this expansion is different because of the federal matching dollars. However, let’s be clear about one thing; this isn’t money Maine can spend as it wishes. This money must be spent on providing childless, able-bodied adults with health care coverage. Additionally, there is no guarantee that the federal government can make good on its share of future funding. The federal government is over $20 trillion in debt, with trillions more in unfunded liabilities and has a history of tinkering with these big government programs once they come to the realization that they can no longer afford to foot the bill. Also, Maine must have the ability to fund its share of the cost in order to receive federal matching dollars. This requires a tax increase on Maine families or cuts to existing programs.

States across the country that have expanded are seeing massive cost overruns that dominate state budgets and take money and resources away from public education and traditional Medicaid recipients – infants, low income children, pregnant women, the disabled and segments of the elderly population whose needs are not met by the Medicare program.

The proof is in the pudding. Maine has been down the road of expansion before, and it is one we cannot afford to go down once more.

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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