Expanding Medicaid: Eat Now, Starve Later

Editor’s Note: This commentary first appeared in the Pittsburgh Tribune-Review.

Everyone knows the adage about “free lunches” – or so I thought. I’m starting to have doubts, based on the negative reaction to Gov. Tom Corbett’s recent decision not to expand Pennsylvania’s Medicaid program.

When the governor released his budget last month, the loudest opposition hinged on Medicaid – government insurance for the poor and disabled. Advocates of expanding the program via the Affordable Care Act and its “free” federal money pointed out that the governor’s decision was a heartless refusal to help Pennsylvania’s poor. But this is not the case.

Medicaid expansion is far from just a financial issue: It’s primarily about the quality of care that Pennsylvania’s low-income citizens deserve. And when it comes to that, Medicaid fails to deliver.

As it stands, nearly one in three doctors in Pennsylvania refuses to take Medicaid patients. Medicaid is notorious for underpayment and bureaucratic snags. Profitable practices turn into money pits surrounded by red tape. Rather than go out of business, doctors decide to cut their losses by cutting Medicaid.

For the families that depend on the program, this means that the line in the waiting room gets longer, if they can get to a doctor at all.

The problem is widespread. A recent study in the New England Journal of Medicine found that 44 percent of children on Medicaid with juvenile diabetes could not get an appointment with a doctor. For those with private insurance, this number was 9 percent. The average wait time for children on Medicaid was a staggering 103 days – more than twice as long as those who were privately insured.

Medicaid doesn’t just fail those it intends to serve – it also fails taxpayers. Beneath the ACA’s “free” fa├žade is a complicated system of taxes and a $500 billion price tag. The law includes more than 20 new taxes, ranging from taxes on tanning beds to investment income to the individual mandate itself.

These taxes don’t just hit the 1 percent – they hit middle-class families. Pennsylvanians are staring at a $6,363 tax increase per family of four over the next decade.

Federal tax increases are only half the story. President Obama’s 2013 budget proposal would have reduced the federal share of Medicaid expansion, meaning that states would have to pay more than originally anticipated.

According to The Heritage Foundation, the hit to Pennsylvania’s state budget would be between $1.3 and $5.5 billion over the next eight years.

Medicaid already consumes 30 cents of every dollar our state government spends. Moreover, Medicaid spending grew 83 percent over the past decade. Expanding Medicaid will only exacerbate this crisis.

While an expansion of Medicaid would be a disaster for Pennsylvanians, continuing with the status quo is equally untenable. That’s why Corbett didn’t just say “no” to Medicaid – he asked the federal government for a waiver to let state lawmakers fix the ailing program for Pennsylvania families.

It’s a request with a proven track record. Florida used its Medicaid waiver to give low-income families the option of buying private insurance. The result? $118 million in savings. Rhode Island saved $55 million. And citizens in these states reported that they were healthier and happier with their medical coverage.

So forget about the “free lunch” – with a federal Medicaid waiver, we could have our cake and eat it, too.

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Nathan Benefield is director of policy analysis with the Commonwealth Foundation (CommonwealthFoundation.org).