Will Maine Legislation Punish the Messenger Who Brought Them Bad Tidings?
So far, Maine has resisted the temptation to grab new federal Medicaid dollars dangled by ObamaCare. However, due to relentless lobbying by hospitals and other interest groups that profit from taxpayers’ dollars, leaders in the Legislature are threatening to interfere with executive authority by introducing a bill to cancel a contract with a consultant who told the truth about the damage Medicaid is doing to Maine’s prosperity.
Expanding MaineCare (as Medicaid is called there) will not only burden state taxpayers; it will also increase inappropriate use of emergency rooms, decrease access to care for Maine’s most vulnerable residents, decrease private coverage, and even increase unemployment.
Today, 62 percent of MaineCare is federally funded. For the newly eligible population, the federal government would pay 100 percent of costs through 2016, then drop its contribution to 90 percent.
This offer is understandably tempting. But chasing after federal dollars has always driven states to increase their own spending, not reduce it. This is clearly shown in a thorough analysis of the costs of expanding MaineCare that the state’s Department of Health & Human Services commissioned from the Alexander Group. The Alexander Group is led by Gary Alexander, who succeeded in reducing costs and increasing quality when he reformed Medicaid in Rhode Island.
Maine is in dire need of such sage counsel. Since 1992, the state has spent more on health care for the poor than on K-12 education. Compared to other states, it ranks third in Medicaid spending as a share of the state budget. One quarter of the population is already dependent on this welfare program.
In 2002, Maine expanded coverage for some of the childless adults for which ObamaCare now demands coverage. The results are sobering: The percentage of people under 65 without insurance barely budged from 12 percent in 2003 to 11 percent on 2011. And from 2000 through 2013, spending on MaineCare increased 146 percent, from $403 million to $992 million, while uncompensated hospital care for uninsured patients rose over 200 percent to about $200 million.
Alexander looked at a range of future scenarios. Its mid-point estimate is that expanding MaineCare would impose an extra burden of $807 million on Maine’s taxpayers over ten years.
Alexander’s critics allege that the gusher of federal funds exceeds the cost to Mainers’ themselves. In 2012, Stanley Dorn and his colleagues at the Urban Institute estimated that the expansion of MaineCare would increase program spending by more than $3 billion over ten years but would save the state about half a billion dollars due to a decrease in uncompensated care.
But Dorn’s estimate is unsupported by Maine’s history or recent evidence from elsewhere. A few years ago, Oregon expanded Medicaid enrollment by lottery. The latest study of that experiment, published in peer-reviewed Science, reported that Medicaid increased the use of emergency rooms by 40 percent.
Medicaid dependents have very poor access to medical care. Avik Roy of the Manhattan Institute surveys the evidence on indigent care in his recent book, How Medicaid Fails the Poor. His conclusion? Medicaid dependents have worse health outcomes than the privately insured and similar outcomes to the uninsured. Expanding MaineCare to healthier people with higher incomes will make it even less likely that the truly vulnerable will get care ― until they show up in emergency rooms.
As Alexander notes, Medicaid expansion crowds out private insurance, at a rate of about 60 percent. That is why Medicaid does not significantly reduce the number of uninsured: It recruits primarily from those who previously had private coverage.
This may be largely because Medicaid expansion reduces the incentives for employment. Evidence for this unintended consequence comes from Tennessee, a state that reduced Medicaid eligibility in 2004. The state dropped 170,000 people, mostly childless adults, from the rolls. This was a drop of 6.9 percent in the proportion of childless adults on Medicaid. The result? The proportion of childless adults with jobs rose by 5.7 percent in the next two years, much more than any other state.
Maine’s legislators might be able to annul Alexander’s contract, but they cannot cancel the truth: Expanding MaineCare will harm taxpayers and MaineCare’s most vulnerable patients.
Maybe legislators cannot cancel the truth, but they are working very hard to do so. And if they cannot change the truth, they will bury it. They will try their best to leave the truth hidden, and will call out anyone who tries to reveal it. That is the problem with the legislators they rather lie and distort the truth than actually accept their mistakes.
The problem is that people don’t look ahead, they only see the headlines. People cheer that the federal government is giving them funds. They applaud the fact that the federal government is going to expand Medicaid and in addition to that pay the bill. They don’t understand, or choose to ignore the fact that the state will have to pay later for that expansion. And because people ignore the future, they vote for representatives that ignore the future. They don’t care what is going to happen five years from now, they care what happens today. Faulty legislation is passed and serious investigations are dismissed because people don’t look at what might happen in the future.
Let’s hope they don’t regret the decisions they are making today, when they have to carry the burden in the future.
Most are not forward thinking individuals. As long as they find an easy fix or solution now, they will tend to worry about the future when it comes.
That is what happens; people support faulty legislation because they don’t know about it. They cheer today but criticize tomorrow. We need to educate ourselves as the electorate in order to have an efficient democracy. It is the responsibility of the government, the electorate and the media to analyze not only the immediate impact, but the long term impact as well.
People would support it or are just indifferent to it because they are not directly affected. People will remain rationally ignorant until they are affected.
The Daily Show that aired yesterday evidenced the people’s ignorance regarding Medicaid’s expansion. With their satirical approach they made fun of the states that rejected the expansion of Medicaid. The show was criticizing the fact that that some states refused the expansion considering that it wasn’t going to cost them. That is the problem. The federal government will not fund Medicaid forever; eventually the states will have to pay for it themselves, plus the related costs of the expansion. But the people and the liberal media are short sighted. They only see the near future (probably not more than a year), instead of considering the implications in the long run.
“But the people and the liberal media are short sighted. They only see the near future (probably not more than a year), instead of considering the implications in the long run.”
Same for politicians unfortunately.
The Daily Show is the most realistic news we can get at this point. American society has become a satire.
But how else would we inform a satirical society that makes satirical decisions. We are involved in a never ending satire, which regretfully will come to a satirical conclusion.
“Expanding MaineCare (as Medicaid is called there) will not only burden state taxpayers; it will also increase inappropriate use of emergency rooms, decrease access to care for Maine’s most vulnerable residents, decrease private coverage, and even increase unemployment.”
Such negative effects also reflects the executive interfere leading to a vicious circle.
Let the states make the decision they believe is right and in the best interests of their residents. Regardless of what it is, expanded or not, they have the right to do so. What I ask is that those making the decisions don’t lie to their people. Tell them the truth. If the legislators are actually working for the betterment of society and what their constituents want, there is no reason to fear for their position. But lying, as they have been doing, harms them and their state. Good legislators are those who stand up for what they believe and those who accept responsibility when things don’t go as planned.
There is not many of those around anymore.
“Since 1992, the state has spent more on health care for the poor than on K-12 education.”
That is ridiculous. Goes to show they care more about being a welfare state than improving education as a path to a better future.
“One quarter of the population is already dependent on this welfare program.”
Maine is the welfare state.
Punishing the messenger is a signal that they don’t want the truth to be known. It couldn’t be clearer that they want to hide something. If we dig deeper we will probably find some private interests in these decisions (both the expansion of Mainecare and the annulment of Alexander’s contract).
Good post, but how could Medicaid recipients cause an increase in uncompensated care? by definition, they at least are covered if they go into the ER.
Over 2/3 of Medicaid spending nationwide is for the elderly and disabled who get on the program.
Adding childless adults is not a big cost driver. Harold Pollack recently wrote that the average young person on Medicaid adds about $564 in spending a year.
The debates about Medicaid vs private insurance are very muddled. Certainly a free program like Medicaid is better than high deductible private coverage for the working poor. Still, there are disturbing anecdotes about doctors who prefer to treat some patients for free rather than take Medicaid enrollees.
This was fascinating — really great post!