| August 5, 2013

The Leavitt Report Is Still Obamacare

Recently, the consulting firm Leavitt Partners released a report paid for by the taxpayer-funded Oklahoma Health Care Authority (OHCA). Unsurprisingly, the report recommends Oklahoma seek “enhanced federal funding” from the Affordable Care Act’s Medicaid expansion.

Proponents have gone to great lengths to avoid the words “Medicaid,” “Affordable Care Act,” “Obamacare,” or other references that might tip off the public that this is a recommendation to implement Obamacare’s Medicaid expansion. This was done due to Obama- care’s unpopularity. In May, a Magellan Strategies’ survey of likely Oklahoma voters found 70 percent agree with this statement: “Because there is so much disagreement among experts on the costs of expanding Medicaid, we shouldn’t rush into any expansion until we have a better handle on the financial consequences.”

Proponents of the expansion argue the report’s premium assistance proposal isn’t Medicaid expansion. U.S. Health and Human Services Secretary Kathleen Sebelius and her staff disagree. In recent guidance to states on premium assistance, states were told that “beneficiaries remain Medicaid beneficiaries and continue to be entitled to all benefits and cost-sharing protections. States must have mechanisms in place to ‘wraparound’ private coverage to the extent that benefits are less and cost sharing requirements are greater than those in Medicaid.”

The report acknowledges that the proposed expansion population has higher risky behavior rates than average and pegs upfront costs at $850 million (this estimate is understated for its use of a healthy population experience for the estimate). Using Obama stimulus-like math, the report tries to wipe this sticker shock away by projecting that economic activity generated by federal funds will actually save the state money. Obamacare is breaking promises left and right, yet taxpayers are to believe funding promises will be kept?

According to the OHCA, 1,007,356 Oklahomans were enrolled in Medicaid during fiscal year 2012. This is 26 percent of the population. Medicaid covers an astonishing 64 percent of births and 67 percent of long-term-care-occupied bed days in Oklahoma. Nearly 260,000 Medicaid patients used an emergency room last year, visiting an ER 528,264 times at a cost of more than $169 million to taxpayers.

Based on last year’s enrollment, accepting Obamacare’s Medicaid expansion (as required in the Leavitt report) would result in nearly 33 percent of Oklahomans on Medicaid. Note: Medicaid spending in Oklahoma already exceeds total state spending on common education and higher education combined.

The Leavitt report’s chief problem is that it largely ignores the major problems in health care: lack of medical price transparency, high costs, and government intrusions in health care, which result in market distortions that put consumers on an uneven playing field with employers and health care providers. The crux of the report is to dump a bunch of money into a health care system that’s still controlled by a black box, especially as it concerns extreme lack of medical price transparency and cost. Sadly, some of Oklahoma’s biggest proponents of the report are working against price transparency.

The Leavitt report is still Obamacare. It’s time to fix Medicaid, not expand it, and make it work better for patients, giving them a pathway off the welfare program altogether.

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