Cassidy Advocate OpEd: Obamacare's Medicaid Expansion will not Work for Louisiana
I received a text this past weekend from a friend whose relative broke a bone. The relative was seen in the ER, but because their “insurance” was Medicaid, they were having problems finding a physician for follow-up. Since Medicaid doesn’t cover the cost of a doctor’s utilities, rent, employees and malpractice insurance, most doctors limit the number of Medicaid patients they see. This is the problem with the Obamacare Medicaid expansion: high cost with limited access, hurting patient outcomes. This is important — the next governor will decide if Louisiana participates in Medicaid as Obamacare dictates.
Medicaid pays so poorly — not even covering the cost of the equipment required for some outpatient procedures — that a patient with Medicaid often ends up in the ER. The journal Science reported a 40 percent increase in ER use among low-income adults in Oregon who gained Medicaid through an expansion. This can be explained at least partly by an observation by economist and Obamacare author Jonathan Gruber, who found that in previous Medicaid expansions, 60 percent of Medicaid expansion enrollees dropped private insurance to go onto taxpayer-funded Medicaid, so called “crowd-out.” The patient whose previous coverage allowed her to see a physician in the doctor’s office now goes to the ER. The doctor-patient relationship is critical to improving health. Paying for emergency visits without physician follow-up does not build a physician-patient relationships.
Perhaps because of this, or other reasons, the beneficial effect of Medicaid expansions on health outcomes is unclear. Studies from the National Bureau of Economic Research, Johns Hopkins, the University of Virginia and the National Cancer Institute show that Medicaid enrollees have worse health outcomes than those with private insurance and Medicare, and in some cases, do no better or do even worse than the uninsured.
The Medicaid expansion is not “free money” without downside. The Urban Institute predicted that expansion would cost Louisiana nearly $1.3 billion over 10 years. An expansion costing that much will be paid for by raising taxes or cutting funds for higher education, infrastructure and other areas of the budget.
Supporting Gruber’s findings of crowd-out is this example: Since Kentucky, a state with similar size and poverty rate to Louisiana, expanded Medicaid in 2014, the number of those with employer-based insurance in Louisiana has increased by 24,176 while the number in Kentucky decreased by 3,434.
We shouldn’t be satisfied with the high cost and poor outcomes of Medicaid. Indiana’s Medicaid waiver converts typical Medicaid to health savings accounts. This empowers Medicaid recipients to be active partners in their care. Instead of taking Obamacare’s Medicaid expansion, the next governor must be pragmatic, and find creative ways, like Indiana did, to ensure access to quality health care while protecting taxpayers.
By Senator Bill Cassidy
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