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Experience confiming Medicaid expansion bad for LA

Undoubtedly spendthrift Democrats looking to back up certain special interests and media mavens with pretensions of moral superiority will jawbone legislators and Gov. Bobby Jindal to accept expansion of Medicaid starting next fiscal year in this upcoming spring’s legislative session. They will do so only by ignoring the mounting evidence that, in any form, it proves a bad deal for Louisianans.

Expansion would provide free insurance to those making 25-100 percent of the federal poverty income limit; currently, these people obtain medical care by appearing at a health care facility where they must be treated or referred at no cost to put them out of medical danger. The state estimates that through 2023 expansion would have cost the state at least hundreds of millions of dollars. In the most likely scenario, by 2030 the cost to taxpayers would end up about $1 billion extra under expansion than under the current regime. Under the least optimistic scenario, costs would have been over $2 billion extra through 2023.

Jindal has pointed to the Medicaid program’s structure as a major reason for the considerable costs, and proposed his own federal overhaul to make it more efficient. Those ideas translated to the state level were passed into law this year, but would need those federal changes to implement. With that unlikely to happen until election of a reform-minded president in 2016, some supporters have tried to grasp onto other states’ efforts that don’t ask for major federal reform but with tweaks.

When in 2013 the Legislature debated the issue, proponents introduced a bill emulating the approach by Arkansas, which took federal dollars to give to individuals enough money to buy private policies. But this provided no real solution because it maintained inflexible federal standards in areas such as payment amount, benefits composition, co-payment policies, and other issues, and wisely was rejected.

Earlier this year supporters began beating the drums again for Louisiana to act similarly when an even broader waiver was sought by Indiana to do the same thing, but with fewer restrictions. Even as this appeared better as it could wring more inefficiency out of the system, it has gone nowhere because the federal government continues to refuse to grant a waiver that contains the very provisions that makes it a less wasteful, less objectionable plan.

And now the Arkansas experiment is unwinding to the extent that its legislature looks likely to defund the entire thing. The problem, predictably, has been the relative inflexibility of the program has pushed costs higher than anticipated onto the state – and this before the state must begin picking up costs in 2017 than will rise by 2020 to 10 percent of the total spending that does not include that extra already being paid above the waiver-mandated reimbursement cap that was unanticipated. Worse, there’s no guarantee that that 10 percent figure that applies to all states in 2020 and after won’t be increased by federal statute in the future.

The Indiana experience shows the unwillingness of the federal government to make even some of the changes Jindal had suggested as part of his reforms. The Arkansas experience shows the costliness to taxpayers in not incorporating those reforms. Another state reform in Oregon, which actually predated expansion under the Patient Protection and Affordable Care Act, showed no statistically improvement in objective health outcomes by those new Medicaid enrollees compared to the uninsured population. This experience demonstrates no benefit to expansion.

And the national experience of other states that expanded Medicaid, for the next two years still paid fully by the federal government, is that it will cost more than expected because emergency room utilization has a whole has gone up as a result of expansion. This is a result both of habits of the new enrollees and because fewer doctors are wanting to participate in traditional Medicaid because of reimbursement and regulatory issues.

All of this experiential data reconfirms the wisdom of Jindal and the Legislature not to pursue Medicaid expansion. It remains a bad deal for both taxpayers and the indigent, and the only question surrounding any of this is why, in the face of such evidence, there are those who continue to want to see it come into fruition.

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