On Obamacare’s Two-Year Anniversary, Expanding Medicaid Rolls on the Horizon

Today marks the two-year anniversary of the signing of the Patient Protection and Affordable Care Act (PPACA) or “Obamacare.”  The highly controversial law, as passed, will have unprecedented effects on health care service and health care spending at both the federal and state levels for decades to come.  On Monday, arguments will begin over the constitutionality of the law in the U.S. Supreme Court.

In preparation for next week’s hearings, here’s another update on PPACA’s effects on Ohioans if the law is upheld in its entirety.  Left unchanged, the number of Ohioans on Medicaid would explode, creating greater costs to taxpayers and greater strain on a fiscally unsustainable program that consistently delivers disappointing results.

As our Crushing Weight report shows, assuming that PPACA is upheld, roughly 500,000 additional Ohioans (20 million total Americans) would be eligible for Medicaid.  Of course, this has a cost.  As Medicaid’s rolls expand and as health care costs continue to climb, this influx is projected to cost Ohio taxpayers an additional $1 billion between 2014 and 2020—not including additional taxes levied by the federal government.

This extra expense is already on top of dramatic increases in Medicaid spending over the past two decades.  Between 1990 and 2010, total Medicaid spending increased by 480 percent.  Adding an additional 20 million individuals to Medicaid will do little to drive down already ballooning costs.

Obviously, this spending growth is unsustainable.  But with millions of new individuals set to enter into the system, quality of care is also an equally important concern.

A growing body of research has shown that individuals on Medicaid typically receive lower quality care than individuals who hold private insurance and even those who have no health insurance.  This occurs for several of reasons.

  • Medicaid reimburses physicians and hospitals for health care expenses at lower rates than does private insurance.  As a result, few physicians can afford to take on Medicaid patients, leaving the poor with fewer health care options.
  • Expansions of Medicaid do not necessarily increase access to medical care.  As Medicaid expands to include larger segments of the population, private insurance cannot compete against Medicaid’s lower reimbursement rate.  This lower reimbursement rate, as mentioned above, leads to fewer doctors seeing Medicaid patients and thereby less access to quality care for enrollees.

There’s wide agreement that quality health care should be available for those truly deserving of public assistance.  But this care must be fiscally sustainable to taxpayers.  Simply flooding an already faltering government program with millions of additional recipients is not embracing fiscal reality, nor does it best provide quality care to those who need it most.

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