The case for expanding medical welfare to cover able-bodied adults has two main arguments. Supporters say giving people taxpayer-funded health care will produce better health outcomes. Second, they say increasing the number of people on government welfare will give hospitals more paying customers and protect facilities from closing, especially in rural areas.
Facts suggest otherwise.
The annual America’s Health Ranking report shows Medicaid expansion has done little to improve health outcomes in states like Oklahoma. Arkansas and Kentucky were ranked 46th and 45th, respectively, while Louisiana ranked dead last.
Put simply, those states are spending hundreds of millions on Medicaid expansion to get comparable or worse health outcomes.
In 2017, research published in the National Bureau of Economic Research examined the results of the Affordable Care Act (which authorized Medicaid expansion) by analyzing the prior two years of data from the Behavioral Risk Factor Surveillance System, an annual medical survey. It found no statistically significant effects “on risky behaviors or self-assessed health.”
Similarly, a gold-standard study concluded an Oregon Medicaid expansion “generated no significant improvements in measured physical health outcomes in the first 2 years.”
Supporters note those added to Medicaid through expansion use medical services more frequently. But that increased utilization is untethered from improved outcomes. States are simply spending more money. They are not getting better results. Medicaid expansion promises the same for Oklahoma.
Why is this so? Researchers estimate personal behavior and genetics account for 70 percent of the determinants of health. Put another way, someone with Medicaid coverage who smokes three packs a day is just as likely to die of lung cancer as a fellow smoker who is not on Medicaid.
But even if Medicaid expansion does not improve citizens’ health, it will surely improve hospital finances, right?
Jay Johnson, CEO of Duncan Regional Hospital and a supporter of Medicaid expansion, previously let the cat out of the bag at a legislative hearing: “On every government payer, we don’t make a profit,” Johnson said. “At our hospital, whether we’re taking a Medicare or Medicaid patient, our expenses are greater than what we will get paid.”
Hospitals lose money by treating Medicaid patients. A larger pool of money-losing patients does not improve hospital stability. Rural hospitals continue to close in Medicaid-expansion states across the country. Researchers found expansion in California, Arizona, and Colorado led to increased profit margins at urban hospitals, not rural hospitals, and there was no offsetting reduction in prices for consumers.
Medicaid-expansion states have had to increase taxes or fees to pay for these sad results. “Obamacare” and the federal government are broke. Further “Obamacare” expansion in Oklahoma means raising state taxes on working Oklahoma families and more borrowing from taxpayers and future generations. Oklahoma’s share of Medicaid expansion, based on the 628,000 who would be eligible, would be $374 million. State income taxpayers in Oklahoma would see hundreds of dollars in income tax increases to cover this expanded welfare.
There is a better way. To cite just a few examples, Oklahoma could direct the approximately $110 million it receives in annual payments and endowment earnings from the 1998 Master Settlement Agreement with tobacco companies to rural health care. Instead of one-size-fits-all rate in the existing Medicaid program, the state could follow other states and pay higher rates to rural doctors and rural hospitals than their urban counterparts. The state could require price transparency from hospitals to increase competition, lower prices and boost consumer access, and could also protect patients by requiring a good-faith, advance estimate of service prices.
The promises of “Obamacare’s” Medicaid expansion will fail in Oklahoma, let’s pursue the better way.
Jonathan Small is the president of the Oklahoma Council of Public Affairs.