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Home » News » Schaeffer: A Medicaid Bubble – and How to Get There
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Schaeffer: A Medicaid Bubble – and How to Get There

Steve RobinsonBy Steve RobinsonJanuary 13, 20143 Comments4 Mins Read
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Maine Wire readers should be well aware that the most controversial policy issue at the State level this year is sure to be Medicaid expansion (or MaineCare, as it’s called here in Maine.)  In fact, the legislature has scheduled a public hearing for LD 1578 on Wednesday of this week (violating their own rules, we should note.)

Medicaid expansion is not new to Maine; from 2002 to 2012, enrollment increased from 200,000 to 338,000.  Compare that to New Hampshire, a state of similar size, where enrollment is 160,000.  Maine has the 3rd highest enrollment nationally, at 27%.  The New England average is 18%, and the national average is 19%.

Expansion advocates want to enroll another 70,000 in the program, raising our total to nearly one third of the population – 408,000 – more than twice the 2002 level.

[Recommended: The Misleading Arguments for Medicaid Expansion…]

Advocates for the expansion claim it will cost virtually nothing to Maine Government, and in fact, can provide savings and economic expansion.  (One wonders, of course, if enrolling people “saves money and expands the economy,” why we don’t just put everyone on Medicaid; think of the boom!  We hear similar claims for unemployment benefits; the same conundrum applies.)

This sounds very enticing on its face; especially to those in the ‘caring sector.’  It also brings to mind recent history – in particular, the ‘great recession’ and its purported causes.  The most frequently cited of those is the “housing bubble,” which is still working itself out of our system.  Graphically speaking, it looks like this:

bubble trap

The party line explanation for the bubble was that ‘predatory lending practices,’ perpetrated by the ‘big banks’ etc, sucked supposedly innocent, unsuspecting borrowers into taking out mortgages they couldn’t possibly afford. This was done, it was explained, by offering artificially contrived and highly unrealistic loan terms at the front end that would elapse in just a few years, and leave the lender with a lasting obligation they were completely unprepared for and unable to afford.  Things like ‘sudden increases’ in monthly payments due to ‘shocking’ interest rate increases, ‘balloon payments,’ and a need to refinance the debt under extremely stressful conditions.

By the time an innocent public came to understand the “fine print,” the bubble burst, and a tsunami of foreclosures swept over the country.

[RELATED: Costs, welfare rolls to soar under Obamacare Medicaid expansion…]

I assert this is the political pathology at play in the movement to expand Medicaid.  The Feds are promising to pay “100%” of the cost of new enrollees for a three year period.  So why not go ahead and blow the bubble up even bigger?  At least that’s the way innocent and well intentioned legislators are being sucked into supporting programs that neither federal nor state taxpayers can realistically afford.  What we have here is ‘predatory cost sharing’ policy that completely masks the real costs of taking on Medicaid expansion under the guise of good intentions.  And plays to the weakness of our entitlement culture and its related professional enablers.

bubble cartoonBy the time the fine print becomes legible (“we’ll have to pass the bill to find out what’s in it”) and cold reality is at the doorstep, the bubble will have no choice but to burst, and economic and social chaos will reign.  Or worse.

If the housing bubble was the cause of the great recession nationally, why are Democrats and their allies in the Entitlement/Non-Profit Industrial Complex working so hard to subject Maine to its own great recession following the same road?

Given the seriousness of this issue and the long term implications for everyone in the state, not just the uninsured, we think it’s appropriate to challenge the numerous supporters of the proposed expansion to go on the record in a very public way.  And so we propose that this Certificate of Medicaid Expansion Advocacy be completed and made public by each and every advocate.


This is a serious suggestion and request.  Those who are determined to weigh the federal and state economy down with an increasingly unsustainable entitlement burden should be willing to stand up and go on the record with their intentions, including clear delineation of the details of how they would pay for it.

I suggest that this process begin at the hearing on Wednesday, by providing the above form to committee members and those who testify in favor of the proposed expansion.  After all, isn’t transparency what good government is all about?

Pem Schaeffer is a retired systems engineer and business development leader. He blogs at http://othersideofbrunswick.blogspot.com/ and can be contacted at pemster4062@yahoo.com.

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Steve Robinson is the Editor-in-Chief of The Maine Wire. ‪He can be reached by email at Robinson@TheMaineWire.com.

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3 Comments

  1. Heather Sirocki on January 14, 2014 7:21 AM

    Be sure to read the fine print of the Medicaid proposal. Wham!! We are already feeling the pain of the 2002 expansion with Medicaid expenses cannibalizing 25% of our budget -doubled in ten years. This is a staggering $2.4 Billion/ year now. Supplemental after supplemental budget due to cost over runs in this one program means we keep running out of money. In fact, we have run out of money every year for the past decade. Maine’s hardworking taxpayers will be in an even larger world of hurt, if we expand again. If you speak up on one issue, make it be this one.

  2. John Frary on January 15, 2014 10:51 AM

    It’s cold and heartless to talk about money, financing, taxes, debt when Democrats are trying to me generous.

  3. Leon Clutts on October 5, 2014 4:41 PM

    jooouli

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