Medicaid Harms States, Poor & Taxpayers

A new report and commentary from the Galen Institute details the reasons why the “free money” promised by the federal government for expanding Medicaid is a bad deal for states. While the numbers focus on Virginia, the rationale applies to Pennsylvania and other states, highlighting the wisdom of Gov. Corbett realizing there is no such thing as a free lunch.

Among the reasons expanding Medicaid would harm states, taxpayers, and the poor:

  • There is no guarantee the federal funding match will continue.
  • Medicaid harms the poor with low quality-care.
  • Medicaid’s access problems will get worse as more doctors drop out.
  • Medicaid raises premiums for those with private insurance.
  • Medicaid will worsen the cycle of dependence.

A Wall-Street Journal editorial makes similar points, that are usually ignored by supporters who claim Medicaid expansion will help the poor and costs states little or nothing. The Journal compares this to a gift of a baby elephant—you have to pay to feed the elephant once the hay runs out. The editorial also points out that Medicaid non-payments represent the lion’s share of “uncompensated care,” one of the purported justifications for the expansion.

Expanding Medicaid is a bad deal for states, and Gov. Corbett made the right call despite pressure from many special interest groups.