Michigan’s Medicaid Mistake

Michigan’s decision to expand Medicaid leaves Pennsylvania and four other states to decide if putting more individuals into a government program is the best way to offer “affordable health care.” The answer is a resounding no.  

While Michigan lawmakers set some condition for expansion—requiring that they get a waiver from the federal government, a new report from the Buckeye Institute and Mackinac Center argues that waivers are only temporary, while expansion will be permanent, costing taxpayers for decades to come.

While some argue that federal money for expanded Medicaid is “free money” that would otherwise go to other states, this is false.  By choosing to expand Medicaid, Michigan lawmakers have added more than $17 billion to federal spending.  In contrast, states that have chosen not to expand, including Pennsylvania, have saved taxpayers $500 billion over the next decade.

Instead of following Michigan, Pennsylvania should look to Rhode Island. Today’s Wall Street Journal highlights new data from Rhode Island’s global waiver that once again reinforces the importance of state flexibility to both improve care and lower costs.

[T]he per-recipient costs fell to $770 a month in 2012 from $813 in 2010. The annual rate of increase was 1.3% per recipient nationwide, but minus-1.1% in Rhode Island. When is the last time an entitlement program’s costs fell?

Two major reforms in particular saved money. The first reduced costly emergency room visits by Medicaid recipients for routine medical needs, and the second reduced admissions to pricey nursing homes by offering home-care subsidies and promoting assisted living arrangements, which seniors generally prefer.