Coburn and Jindal: Fix Medicaid, don't expand it

July 3, 2013

OCPA has repeatedly made the case that Oklahoma should reform Medicaid, not expand it. Our FY-2014 budget recommendation included significant patient-centered Medicaid reforms. Oklahoma lawmakers passed some of those reforms in the House of Representatives, only to be thwarted in the Senate.

When it comes to arguing that Medicaid needs to be reformed, not expanded, OCPA is not alone. Former OCPA trustee Tom Coburn is a U.S. Senator and a physician who has cared for thousands of Medicaid patients. Louisiana Gov. Bobby Jindal, a former member of Congress, is the former secretary of Health and Hospitals for Louisiana. In a recent article titled “Fix Medicaid, Don’t Expand It,” Dr. Coburn and Gov. Jindal wrote:

The Supreme Court found Obamacare's forced Medicaid expansion would have fundamentally changed the nature of the program. They were right. Medicaid was designed to be a safety net for certain low-income Americans with special needs — mothers and children and the long-term aged, blind, and disabled — not an entitlement program for Americans with the means to make reasonable contributions to the cost of their coverage.

Expanding Medicaid would undermine the private market and essentially herd Americans into government-run "care." But let's remember, that was the President's original goal in the first place. Researchers from Harvard and Boston University have found that a large portion of the newly covered population under Medicaid could have had, or been eligible for, private coverage. They conclude, "the Medicaid expansion provisions of [Obamacare] will shift workers and their families from private to public insurance without reducing the number of uninsured very much."

We have already seen examples of Medicaid expansion crowding out private coverage. In the long-term-care market, for instance, Medicaid's rapidly growing benefit has discouraged Americans from accessing more effective private coverage options.

President Obama is fond of invoking a call to fairness when advocating for his policies. We would challenge him to apply that same test to his Medicaid expansion and answer the following questions:

Is it fair that under an expanded Medicaid program, the federal government would pay a greater portion of the Medicaid dollar for an adult with no children above poverty, than for a single mother with children who live in poverty?

Is it fair to expand a program that allows an individual to own a Lexus and qualify for a long-term-care benefit because Medicaid allows the exclusion of one vehicle regardless of value?

Is it fair for this Congress and Administration to promise benefits from an expanded Medicaid program that soon will demand either dramatically higher taxes, significant benefit cuts, or both?

Is it fair to claim short-term political and financial gains from expanding Medicaid, while socializing the negative impacts of crowding out private coverage and delaying or denying care to the neediest citizens?...

[F]inally, there's the issue of math. One of the most persistent arguments for expansion is the notion that it's just "money on the table" for states. After all, proponents of expansion say, the federal government would pay for 100 percent of the expansion for the first three years and then reduce payments to 90 percent in years thereafter. So, the federal government is like a clever car salesman offering to put states into a new car they cannot afford, by offering the first few months for free. Never mind what happens after that.

But the catch is that future Congresses are bound by nothing. Uh oh. The federal government can change this formula when it pleases, or ignore it entirely. And we know the federal government has a history of overpromising and under-delivering when it comes to aid to states. The federal government is like a dinner host who promises a feast of benefits but only pays for the drinks and appetizers, leaving the guests — the states — holding the check for the meal.

Consider education. When Congress passed the Individuals with Disabilities Education Act (IDEA) in 1975 the federal government promised to pay 40 percent of each state's costs. Yet, over the past two decades the federal government has paid less than half of what it promised. Since 1995, that shortfall has cost states around $175 billion.

Why, then, should states trust the federal government to meet its 90 percent promise under a Medicaid expansion? After all, the federal government doesn't have a plan to keep the promises it has already made. It is unwise to trust the federal government to keep new promises it can't afford.

Even if the federal government has good intentions, the money just isn't there. And make no mistake; states already face substantial budgetary pressures from Medicaid. Under the status quo, Medicaid spending will continue to consume nearly a quarter of every state dollar, passing education as the largest state budgetary commitment. Increased Medicaid spending will further crowd out other state spending and make the fiscal outlook for states even worse.

Unfortunately, the newly released Leavitt Partners report advocates expanding Medicaid as allowed by Obamacare. But whether it is the “Michigan Plan” or the “Arkansas Plan,” Sec. Sebelius and her agency have already said that ultimately those who use Medicaid or receive premium assistance from Medicaid are “Medicaid beneficiaries.”

Policymakers must remain resolute in their decision not to expand Medicaid. Oklahomans — including overwhelming majorities of conservative and Republican voters — agree that it’s time to fix the program, not expand it.