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Incomplete Medicaid expansion report misleads

Present one-sided information to the public and you’re likely to shape public opinion in that direction, a result recently captured by some academic researchers found echoing from the works of others.

Revealed publicly piece by piece, the latest installment of the 2018 Louisiana Survey conducted by Louisiana State University’s Reilly Center for Media and Public Affairs focused on public attitudes about Medicaid expansion and criminal justice reforms. This came on the heels of a study released by the Department of Health that purported to show a positive fiscal impact from expansion.

The survey said 69 percent of Louisianans approved of expansion, and the report claimed state revenues over costs from expansion climbed $55 million while local governments received an extra influx of $75 million. It also asserted health care gains would accrue from expansion.

Likely the report influenced few respondents, but it fits the pattern of LDH behavior following Gov. John Bel Edwards’ ordering of expansion: part of a relentless propaganda campaign to justify his doings. With the power of the executive branch behind that and a media content with echoing this line, that could explain the poll results obtained.

The only problem is that the report, prepared by academicians associated with LSU’s Public Administration Institute using an LDH grant, is deeply flawed by its incompleteness. It appears to follow a model employed by other states wishing to justify expansion, or by advocates trying to entice their states into expanding Medicaid.

Principally, it only looks at the revenue side and ignores the cost side entirely. For example, the report devotes exactly one sentence to the primary state-sourced financing mechanism, an increase on insurance policy premium taxes and on taxed hospital stays that raised over $200 million in additional taxes, while ignoring the economic impact of extracting that money from the economy.

It also makes great hay over a flood of nearly $2 billion extra federal dollars coming into the state from expansion, using the first year as the base when the federal government picked up 97.5 percent roughly of expansion costs. But that money came out of the pockets of Louisianans as well, which also retards economic growth uncaptured by the analysis.

Such a narrow approach could justify any government spending. For example, if the state raised taxes and devoted the extra funds to producing widgets, economic activity would ensue that the model used in the report would capture. But that ignores the costs of taking that money out of the economy and what growth that removed money could have generated if used for other economic purposes.

Note also that the report focuses only on fiscal year 2017, while the federal government’s reimbursement rate will continue to decline to 90 percent. Assuming everything else stays the same, using the report’s own figures and assumptions by FY 2022 state costs will approach $190 million, meaning a net overall burden to the state of almost $90 million by then.

And it leaves out that a good portion of the spending, if trying to bring insurance to the uninsured, is wasted. While it reports the proportions of the public insured privately (individually and through employers) or through government programs like Medicaid and the uninsured prior to expansion, it notably doesn’t report the same figures afterwards. This masks that a considerable portion of the expansion population comes from those who once paid for their own insurance but dropped that to now have the public pay for them.

The report also fails to note that the alleged “savings” come about in part only because Louisiana chooses policies that create additional expense where greater savings would come about if the state simply didn’t follow these. For example, it guarantees free care to those individuals earning less than the 200 percent Federal Poverty Level, for which it obtains partial reimbursement from the Disproportionate Share Hospital program. Expansion shifted the 26-138 percent group from DSH at a better rate to “save” money, but costs would go down much further by following the lead of other states in scrapping the 200 percent level, bringing it down to 138 percent.

Simply, the report fails to present the full picture and uses data that already has become outdated and will produce unfavorable results in the future. Blame for its shortcomings may not fall on the researchers, for perhaps the terms of the LDH grant restricted them in what they could do, as part of the ongoing propaganda effort.

But it does serve as yet another example of how the Edwards Administration so desperately tries to pass off Medicaid expansion as something other than another form of redistributionist welfare that has higher costs than benefits. Although shoddy in painting a genuine picture of expansion’s economic impact in Louisiana now or in the future, it succeeds in distracting the public from expansion’s true nature.

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