Rolling back Medicaid expansion can be done without forcibly removing anyone
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As Republicans in Congress grapple with healthcare reform, there are increasing reports that many are quietly seeking ways to preserve Obamacare’s Medicaid expansion, frightened by the prospect of removing people from the program and the political consequences that might accompany it.

But keeping this core component of President Obama’s healthcare law would not only be an abhorrent broken promise to voters — it is also completely unnecessary. Rolling back Medicaid expansion can be done without forcibly removing anyone from its rolls like its supporters claim.

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Even before Obamacare’s expansion, traditional Medicaid patients — the disabled, elderly, poor families with children — suffered from long wait times and poor health outcomes.

 

This owed to overcrowding and low reimbursement rates. In adding thousands of able-bodied, childless, working-age adults in states that accepted the expansion, Obamacare only worsened this problem.

Every single Medicaid expansion state has enrolled more people than previously projected. Kentucky’s 439,044 enrollees as of December 2015 were 134 percent more than the state projected. In Nevada, the state enrolled 187,110 by September 2015 — 140 percent more than the state projected.

California had enrolled over 3.8 million people in Medicaid expansion as of May 2016 – an astounding 322 percent more than projected. In total, they have more than doubled initial projections across the 31 expansion states.

Unsurprisingly, this resulted in enormous cost overruns that are draining state budgets. New enrollees’ costs are almost fifty percent higher than the federal government projected. Medicaid eats up more one-third of the entire Rhode Island state budget, for example.

Ohio Gov. John Kasich’s Medicaid expansion ran $2.9 billion over budget in the just the first two years.

In Illinois, health officials originally estimated expansion would cost the state $573 million from 2017 through 2020, but when nearly 200,000 more people enrolled than expected in 2014, budget official revised that projection to $2 billion — more than triple initial estimates.

Medicaid was a primary driver of state and federal spending and the national debt long before Obamacare, but the problem has only gotten worse.

This has forced many states to cut back on other safety net programs. Some states, like Connecticut, even cut back on benefits for traditional Medicaid patients in order to pay for the expansion to able-bodied, childless adults.

In order to protect taxpayers and the truly needy, Congress and the President should repeal the Medicaid expansion. And to offer a smooth transition, they should couple it with an enrollment freeze and off-ramp for current enrollees. Shutting the front door will stop worsening the harm. An off-ramp would allow enrollees to remain on the program for a set period of time through which their incomes would likely grow significantly. The vast majority will cycle out of Medicaid as their incomes make them ineligible – which, after all, is the ultimate goal of welfare.

Such a strategy has proven effective in the laboratories of democracy. Research from the Foundation for Government Accountability shows that when Arizona and Maine froze enrollment on previous expansions of Medicaid, both saw drastic declines in dependency.

In Arizona, enrollment dropped 70 percent in two and a half years. In Maine, it fell 52 percent in just a year. And no, people were not dying in the streets. Both were approved by the Obama administration and were successful across the board.

A federal off-ramp enacted now lasting until Dec. 31, 2019 would be longer than both of those in Arizona and Maine, which would provide for an even smoother transition.

Cycling able-bodied adults into self-sufficiency would be sped up even further when coupled with other proven reforms like work requirements for welfare.

Republicans ran on a promise to repeal Obamacare when voters gave them control of the House in 2010, the Senate in 2014, and the White House in 2016.

Now it’s time to put words into action. Repealing Medicaid expansion with an enrollment freeze and off-ramp is a crucial part of health care’s next chapter. It’s a sure step to making healthcare work for all Americans. 

Akash Chougule is the Director of Policy at Americans for Prosperity.


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