Michael Carnuccio | August 14, 2015
Free Market Friday: More Medicaid not the answer
State officials recently announced a continuation of the Insure Oklahoma program.
Insure Oklahoma is a modification of Medicaid that provides premium assistance for working adults. The Obama administration has threatened to shut down the program on multiple occasions if Oklahoma didn’t expand Medicaid – a part of the Affordable Care Act the Supreme Court ruled optional for states. Thankfully, Oklahoma’s lawmakers have wisely reminded the administration of their promise “if you like your plan, you can keep your plan.”
Recent news reveals why Gov. Mary Fallin, current and former legislative leaders like Senate President Pro Tempore Brian Bingman and Speakers Jeff Hickman and T.W. Shannon, and so many other state lawmakers respectfully declined the Medicaid expansion. According to the Associated Press, USA Today, CNBC.com, the Foundation for Government Accountability and others, Medicaid expansion enrollments are surging past estimates. The program is a budget-buster.
A review by the Foundation for Government Accountability of available enrollment data for 17 states that have participated in the Medicaid expansion reveals enrollments exceed estimates by a combined 91 percent. Officials from Medicaid expansion states voiced concern in a recent report by the Associated Press. They worry their states won’t be able to cover their portion of expansion costs.
Does any of this sound familiar?
But it’s not just enrollment. A recent report by the Office of the Actuary at the Centers for Medicaid and Medicare Services estimates the average benefit cost for adults newly eligible for Medicaid is $5,517 per person. That’s 19 percent higher than those eligible for non-expanded Medicaid, whose average benefit costs in 2014 were $4,650. The federal government previously predicted newly eligible Medicaid enrollees would cost less.
Hospitals in Kentucky report that because so many newly eligible people dropped private coverage in favor of Medicaid, hospitals face greater budget pressures than prior to the ACA.
To make matters worse, the costs of ACA mandates are starting to show up in health insurance policies on state and federal exchanges. Double-digit percentage premium increases are now necessary to provide people “coverage.”
Much work is left to make sure Oklahomans can get affordable care. Policymakers have made those prospects better by avoiding the Medicaid expansion trap and focusing their energy on market-based, consumer-driven reforms that increase access and affordability.
Former OCPA President