Is Medicaid Crowd-Out the Only Effect of Obamacare?
Medicaid “crowd-out” is the hypothesis that enrolling more people in Medicaid will cause some people to drop private coverage in favor of Medicaid. Historical analyses of this effect come to a wide range of estimates, as Linda Gorman discussed in a recent blog entry.
Now courtesy of the Robert Wood Johnson Foundation (RWJF), we have evidence that the entire effect of Obamacare so far is to crowd out private coverage. The RWJF report further confuses the consequences of Obamacare on coverage and access to care. This is not the RWJF’s fault: The emerging evidence on Obamacare is a jumble of contradictions. In this instance, the report insists that physicians saw no increase in patient demand after Obamacare, as demonstrated in Figure 2. More sophisticated metrics showed that the complexity of patients’ needs also did not increase after Obamacare.
However, there was a significant increase in Medicaid patients as a share of patients seen. In states which expanded Medicaid, this proportion increased by one quarter, from 12.3 percent to 15.6 percent, and barely budged in states which did not expand Medicaid. Both these findings contradict other evidence that Obamacare patients consume many more specialty drugs than non-Obamacare patients; and that many states which did not expand Medicaid also experienced a (smaller) increase in Medicaid dependency that states which expanded the program.
Nevertheless, if the RWJF report trumps this earlier evidence, we are left with an equally disturbing conclusion: Obamacare did not increase access to medical services at all, it merely replaced privately paying patients with taxpayer-funded patients. And need we remind you that at the beginning of June, almost three million Medicaid applications had not been processed?
For all the PPACA fanfare, there doesn’t seem to be a huge influx of people who weren’t already receiving care. But, then again, we argued that point four years ago.
I agree Devon. This law never even got close to providing “universal” coverage, as most Leftists wanted. Instead, as this report shows, it has simply acted as a huge Medicaid expansion. And, like Frank says, that is getting us increasingly closer to a single-payer type of system.
Interesting. Would this be parallel to a single-payer system?
That is exactly what is happening. There is a crowd out effect going on, where public coverage is crowding out private companies offering coverage. Perhaps that was an intended consequence of ObamaCare, to crowd out private insurance companies.
I bet there is a risk corridor for that…
The is the very definition of crowding out, and I kind of suspect that HHS has wanted this result all along. After all, it’s encouraging more people to leave the “evil” private insurance market and become more dependent on the government. And with another 3 million still to sign up, its “mission accomplished” for the folks who want government-run healthcare.
Pick your poison, get covered by the evil insurance companies or the evil government. At this point, it’s really a toss up.
“Obamacare did not increase access to medical services at all, it merely replaced privately paying patients with taxpayer-funded patients”
Indeed, not many have improved access or quality, and the vast majority simply have someone else paying for their medical care. And probably getting worse care overall. However, more doctors are leaving Medicaid, so we’ll see where these patients turn next.
Evidently they can just go to hospitals, since hospitals are supporting Medicaid expansion and encourage seeing Medicaid patients.
“Obamacare did not increase access to medical services at all, it merely replaced privately paying patients with taxpayer-funded patients.”
So basically, instead of giving more people access to services, it just substituted their private coverage onto Medicaid. I wouldn’t be surprised if Medicaid continues to expand and expand until we have a single payer system.