Expanding Medicaid May Cost More than Experts’ Estimates

Higher taxes and more government spending won’t make health care more affordable, no matter what the special interests say.

By Michael F. Cannon of Cato.

"Twelve states have refused to implement ObamaCare’s Medicaid expansion. One of those states is Kansas, where Medicaid‐​expansion advocates are seeking to expose patients and taxpayers to enormous risks.

Those folks are right about one thing: health care is too expensive.

But Medicaid is part of the problem.

Economists have found, for example, that Medicaid increases prices for prescription drugs.

Trying to make health care more affordable by expanding Medicaid is like trying to get out of a hole by digging.

A report from the Kansas Health Institute estimates new federal incentives would bring the 10‐​year cost to Kansas taxpayers of expanding Medicaid down from $738 million to just $320 million.

If only it were so. Medicaid expansion exposes Kansas taxpayers and patients to risks the Kansas Health Institute doesn’t mention.

First, there is the risk that Medicaid expansion will cost state taxpayers more than initial estimates indicate.

In states that have expanded Medicaid, enrollment and per‐​enrollee spending have exceeded projections. Even under current law, the cost to Kansas taxpayers could be multiples of what the Kansas Health Institute projects. Second, there’s the risk that Congress will change the law.

Whenever it wants, Congress can shift some or all of the total cost to Kansas taxpayers.

According to the Kansas Health Institute, that total cost is $13 billion over 10 years—more than 40 times greater than its estimate of the cost to Kansas taxpayers.

Third, if Kansas legislators expand Medicaid, they will add to record levels of federal debt and hasten the day when Congress either defaults on its debts or makes dramatic cuts to avoid default.

When that happens — or even when the state faces a budget shortfall —the first heads on the chopping block will be Medicaid enrollees. Kansas legislators can and should expand access to health care for the poor.

They can do so right now—without costing taxpayers a dime.

Legislators should allow clinicians who hold licenses from other states to treat Kansas patients, regardless of whether those clinicians hold a Kansas license. Arizona has already enacted such a law.

Legislators should make quality coverage more affordable by allowing consumers to purchase renewable term health insurance, Also known as short‐​term plans, and health plans from U.S. territories, both of which are free from ObamaCare’s costliest hidden taxes.

These reforms would restore the right to choose one’s providers and health plan. They would expand competition and reduce health care prices. Neither would put Kansas at the mercy of Congress or cost Kansas taxpayers a single dime. Providers and insurers oppose these reforms because they like it when government protects them from competition.

Kansans are not debating Medicaid expansion because it’s a good idea. Medicaid expansion is a live issue because providers and insurers—you know, the folks who charge so much for care and coverage that consumers cannot afford it — want even greater government subsidies than they already receive. And they are spending lots of money to achieve that goal. Medicaid expansion is proof that the system serves the special interests.

Supporters pretend Medicaid expansion would not require higher taxes because they know the truth would be fatal to their aims. But sometimes they say the quiet part out loud, like when former Senate Majority Leader Jim Denning, R‑Overland Park, proposed a tax hike to pay for it.

Higher taxes and more government spending won’t make health care more affordable, no matter what the special interests say. Allowing choice and competition in Kansas’ medical and health insurance markets is the only sustainable, affordable way to improve access to care for low‐​income Kansans"