Data show huge Medicaid expansion redistribution

Gov. John Bel Edwards won’t give up in trying to con the public into believing Medicaid expansion netted a win for Louisiana.

Periodically, his administration breathlessly announces with positive spin some new factoid about the program, which has put approaching a half million more Louisianans on the public dole. The latest comes from a survey that extrapolates the adult uninsured rate in the state has fallen by just about half from six months prior to expansion through 2017.

Fixating only on insured status does miss the larger point of access to health care. Perhaps less than in any other state, because of Louisiana’s archaic public hospital system, does the lack of insurance translate into no health care; plenty of those uninsured people had access to health care – for free – prior to expansion.

And on the other side of the coin, having Medicaid now doesn’t guarantee timely access, if at all, to health care. The survey captures this in that 28 percent said they delayed medical care because they couldn’t get an appointment, a 14-fold increase over data from the 2015 version. That may not all be imputed to expansion, but no doubt a healthy chunk of it can be from expansion signups overwhelming the system.

(NOTE: The error noted below in the strikethroughs has been corrected by the authors, although the copy posted by the state in the link above contains the original erroneous text.)

The survey also noted that almost 9 percent of the decrease came from the lowest income individuals, defined at the 19 24 percent or less federal poverty level. But they already qualified for Medicaid, so expansion had nothing to do with their gaining insurance. The same is true, although the researchers didn’t create categories to capture it, for the 20 to 25 percent group, so this “woodwork effect” (as researchers call it) overstates the impact of expansion by perhaps 10 percent. So, the "woodwork effect" (as researchers call it) overstates the impact of expansion by this much.

However, the survey presentation makes a critical error here that muddies this conclusion. The 2015 version reports the same FPL 19 percent and less number for 2015 as in the most recent report – but in 2017 is categorized as “under 24 percent FPL;” not the same thing. This introduces the same error in the next category up. This makes it even more difficult to determine precisely the woodwork effect.

Then there are data the Edwards Administration hopes observers gloss over. Specifically, adjusting for the fact that the presented statistics totaled to more than 100 percent because of individuals with multiple sources of insurance, Medicaid proportions increased only 8.5 percent in the two years, which doesn’t account for the all of 11.3 percent drop in the uninsured. That and more came from increases in Medicare enrollments (likely a combination of an aging population and the woodwork effect transferred from publicity about expansion), military insurance, and in that purchased.

Together, these accounted for more than the gap, because other categories saw declines. Former employers saw a drop, probably due to the aging population shifting into Medicare. But, most significantly, employer plan participation dropped by nearly a percent. Much of the amount must have come from people dropping plans that cost them money and entering Medicaid where they had to pay nothing.

This transfer of private responsibility to taxpayers becomes confirmed among the beneficiaries of expansion, at the 138 percent and less FPL. While from 2015 to 2017 40,000 fewer people had employer insurance, 10,000 fewer bought it on their own, 23,000 fewer paid in to a plan from a former employer, 11,000 fewer received it from the military, and 6,000 fewer had it paid for by someone outside the household (almost exclusively younger folks), 12,000 more had signed up for Medicare and a staggering 142,000 more were on Medicaid.

Put it another way, assuming the Medicare increase took care of half the drop for retirees, 67,000 (assuming all with military insurance don’t pay premiums) or 47 percent of the Medicaid increase came from people paying for their insurance either partially or entirely who now make the taxpayer pick up the tab. At an average cost of $500 a month, that’s a staggering $402 million extra a year Louisianans pay for people likely not previously uninsured (although any double counts, which in this income group likely are few, would lower that number). And that doesn’t include those in the military or separated with benefits that, for whatever reason, might have abandoned that for Medicaid.

That’s why ratepayers, taxpayers (because Louisiana Medicaid is now run for all but waiver programs as a managed care regime), and many hospital patients saw a tax increase in excess of $200 million dollars passed on to them upon Medicaid expansion to pay for all of this. Plus, although the Edwards Administration commissioned a study, flawed as it turned out, to try to argue expansion caused net economic benefits that translated into more government revenues than without it, a more valid conclusion is that expansion is a net drain on both government coffers and the state’s economy – and only will escalate in magnitude in the coming years.

Edwards can cheerlead all he wants on the issue, but all it amounts to is a massive transfer of wealth from middle income and above to lower income individuals that, at least in terms of outcomes, has yet to pay off. Louisiana continues to be worse off for him having expanded Medicaid.