MHPC: Don’t Expand Maine’s Medicaid Under Obamacare

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Expanded Medicaid enrollment increases private insurance rates, burdens taxpayers without reducing number of uninsured

PORTLAND – The Maine Heritage Policy Center today released a report saying that Maine should not expand its Medicaid coverage under Obamacare. States will have the option to add government-funded coverage for healthy individuals under 65 who are at 133% of the poverty level because of the controversial health care overhaul. Originally, the law sought to force states to expand Medicaid, but the Supreme Court threw out that requirement, giving states the option to deny the expansion without penalty.

In Maine, more than 25 percent of all residents are on Medicaid, and the MHPC report says that adding more enrollees to a system that is already too expensive would spell disaster. Despite Obamacare’s promise to initially cover 100 percent of expansion costs, the federal government has a track record of underfunding Medicaid expansions.

“When considering this ill-advised expansion plan we need to remember first and foremost that federal money is never free,” said the author of the report, MHPC’s Director of Health Reform Initiatives Joel Allumbaugh. “We are fooling ourselves if we pretend that federal money is anything other than our own tax dollars, despite what advocates for government-run health care will say.”

“Federal funding is also for eligibility expansion – not administrative costs,” Allumbaugh added. “Ultimately, Maine will bear the cost of administering a projected 37,000 new enrollees, most of which will translate to new permanent fixed administrative expenses.”

The study also showed that in Maine’s past Medicaid expansions the uninsured were not helped by the expansion, but instead, Maine residents dropped privately held insurance to go on taxpayer-funded plans. Maine’s uninsured rate is nearly the same as it was in 1999, while government-run health care enrollment has more than doubled in the same time period, from 10 percent of those insured to more than 23 percent in 2010.

“Governor LePage and his administration have made great strides to solve Maine’s health care challenges and reduce our dependence on government-run health care programs,” Allumbaugh said. “Pushing forward with Obama’s proposed Medicaid expansion would take Maine backwards, towards more government dependence. We can’t let this happen, Maine taxpayers and ratepayers deserve better.”

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Read the full report online here

Download the full report here (PDF)

Maine’s insurance by type chart

1 COMMENT

  1. Without giving national figures as comparators, this chart tells you very little. 

    Why? Because nationally, the rate of uninsurance went up quite a lot during that time period, due to the dynamics of the insurance market and the lack of affordability for employers and, more recently, the recession that began in 2008.  The fact that Maine’s uninsurance rate did not rise is a sign that something different happened — a set of policies that kept the same percentage of Maine people insured.  

  2. The graph is quite useful for isolating the correlation between Mainecare expansion, reduced private insurance and an unchanged uninsured rate.

    We know that Mainecare reduces incentive to work and gain income, it shifts costs to private insurance and takes money out of the productive economy via taxes.  These are the mechanisms by which Mainecare caused a significant shift from private insurance to government insurance. 

  3. “We know” no such thing. The research doesn’t support any of those contentions. And, if you look at the chart at my link, you’ll see that Maine’s uninsurance rate is HALF the national rate. Maine’s at 11% when the national rate is 22% and it increased nationally but not in Maine. Thus states that didn’t expand Medicaid didn’t maintain its private insurance coverage more than Maine did. Those folks just did without coverage and had higher rates of illness, death and bankruptcy.

    Moreover, it’s completely specious to say that not expanding Medicaid means that the federal government won’t be paying for these folks’ health care.  If those individuals don’t go on Medicaid, there will still be significant federal funds spent on them for health care,  as these folks will be eligible for the large subsidies for low-income people purchasing insurance under Obamacare. (And those subsidies are available further up the income ladder, with a $10,000 subsidy for a family with a $40,000 annual income.) The only difference is that it will cost more than covering them under Medicaid, which has far lower administrative costs than private insurance.

  4. You claim to have a correlation to Medicaid expansion and uninsured rates but have no mechanism to demonstrate causation.  In fact, there is significant evidence that Medicaid has a negative impact on purchasing private insurance.  I’d suggest demographics as the cause of Maine’s uninsured rate.  Young, healthy people who make too much for Medicaid and illegal immigrants are the bulk of the uninsured and Maine has comparatively less of these than the nation as a whole.

    I’ve never understood the idea that we should pay for the uninsured or we’ll have to pay for the uninsured.  Dirigo tried to take savings on charity care and plow it back into more insurance.  It was far too tiny to finance the program and they had to massively cook the numbers to keep Dirigo afloat. 

    There’s a “social justice” agenda under the surface of Dirigo and Obamacare.  The plan is to make the rich poorer and sicker through taxes and rationing.  This will happen to the middle class but the real rich will work around it, as they usually do.

  5. Amy, doesn’t matter what your chart shows, and expansion under the disaster that Obamacare is, and will be if it’s not eliminated with the defeat of Barrack Hussein Obama in November, will be unaffordable to the taxpayers of Maine.  All this will do is drive up costs, for everyone, while allowing even more Mainers who lack the decency to get off their backsides and provide for themselves and their familys.  This should not be implemented.

  6. You wrote, “The plan is to make the rich poorer and sicker through taxes and rationing.” So your view is that one of the motives of supporters of  expanding health coverage is undermining some people’s health? Pray tell, what is your evidentiary basis for this contention – and how does that work, considering that “the rich” have no bars whatsoever in getting whatever health interventions they can pay for.

    You are correct that the demography of Maine is different from much of the nation. However, if you wanted to establish that this, by itself, was enough to explain the fact that uninsurance rates didn’t increase — and in fact dropped — when elsewhere it increased, you would have to do research using multiple regression. This method is taught in first semester graduate-level statistics and I’m sure that someone in a policy center could run the numbers rather easily.  

    Absent that, the data and analysis provided here do not support your monocausal claim that Maine had a stable and low level of nonelderly uninsurance over time, simply because of demographics. Given that insurance rates drop during recessions — and did so all over the country, but not in Maine  — it’s unlikely that your hypothesis would be supported, but, hey — let’s see the regression.

  7. Your monocausal claim that Medicaid kept uninsured rates unchanged needs some multiple regression analysis. 

    The data shows that people dropped their private insurance when subsidized insurance became available.  More did this after 2008 but it’s wrong to assume that they all would have gone to uninsured status.  Some would have kept the insurance and sold the snowmobile, for example.  More people would have had the means to keep their private insurance if the state’s insurance laws didn’t drive up the cost significantly.

    I’ll clarify my comment about “social justice” and Obamacare.  It legislated more insurance purchase, which if you look at it will mostly come from Medicaid expansion.  Some people will elect to buy the mandated $20,000/family insurance rather than pay the $1500 fine.  Yes, there are subsidizes available.

    There is a cost to increased insurance via Medicaid and subsidizes.  Obamacare elected to pay for it via taxes, reduced payment to providers, an unelected rationing board and cooking the numbers.  Obamacare’s authors intended the rich to bear the brunt of the costs and rationing.  What will actually happen is the middle class, who can’t buy their way out of it, will be stuck with the costs and poorer care.   The truly rich will skate around it, like I said.

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