Why the fear-mongering on Medicaid is totally overblown

By Charles Blahous of Mercatus. Excerpt:

"Before the Affordable Care Act, Medicaid required states to provide coverage for certain groups, including seniors, people with disabilities, pregnant women and families with young children living on incomes less than or near the federal poverty level. The ACA expanded potential coverage to include childless adults with incomes up to 138 percent of the poverty line, but the previously eligible low-income patients who depend on Medicaid for lifesaving treatments would remain covered even if the ACA were fully repealed.

In fact, these vulnerable individuals might even benefit from a repeal in some respects. One controversial provision in the ACA provided a far higher level of federal support for childless adults — who before the expansion had rarely been eligible for Medicaid, regardless of income — than what has been available for the program’s historically eligible population. This imbalance distorted state decision-making, favoring coverage for the expansion population over timely access for the neediest individuals to Medicaid’s limited supply of health services.

The elevated federal payments for Medicaid expansion have also contributed to other problems. For example, some researchers now warn that the expansion has resulted in a shortage of primary-care physicians in Medicaid, although academic studies have produced mixed results.

And in terms of the budget, federal Medicaid costs would rise under current law from $389 billion today to $650 billion annually by 2027 — a growth rate that outstrips our ability to finance it. In both 2015 and 2016, per-capita costs for the Medicaid expansion population came in more than 60 percent higher than previous estimates (largely because states passed on virtually all expansion costs to the federal government). Earlier this month, the chief actuary at the Centers for Medicare and Medicaid Services (CMS) raised projections of expansion’s per-capita costs even further.

The Congressional Budget Office has projected that the pending legislation before Congress would result in large cost savings, primarily by comparing the bills with how Medicaid enrollment would evolve if the ACA remained on the books. That comparison is important, but it obscures how many people would remain on Medicaid’s rolls. In fact, the CMS actuary projects that under the House bill, total Medicaid enrollment will stay roughly constant above 70 million people over the next decade. This is lower than it would be under the ACA, but higher than the enrollment population before the ACA was enacted (roughly 55 million)."