Many consider Massachusetts’ health law from 2006 — aka “Romneycare” — as the inspiration for the Affordable Care Act — aka “Obamacare.” While there are some important differences between the two, Utah legislators would be wise to reflect upon cautionary tales from Massachusetts before considering bringing Obamacare’s Medicaid expansion to the Beehive State.
While I have huge respect for Mitt Romney, having worked for him when he was governor, it must still be noted that in pre-Romneycare Massachusetts, roughly $1 billion a year was spent on uncompensated care, mostly paid for — as now contemplated by Utah policymakers — via a “health care provider tax.”
In Utah, health care providers (hospitals, doctors, pharmaceutical companies and insurance companies) would be taxed to expand Medicaid coverage to able-bodied adults. The well-intentioned thought behind this is that if you get more people covered, you will reduce health care costs. However, as William F. Buckley Jr. once said, “idealism is fine, but as it approaches reality, the costs become prohibitive.” Massachusetts’ history has borne out that truth.
Unfortunately most trends in Massachusetts have been moving in the wrong direction since expanding Medicaid. First, after initially seeing a decline in the amount of uncompensated care for the uninsured, demand in Massachusetts has spiked back to over $600 million to $700 million a year, and the number of patient visits being paid for under this Health Safety Net fund has actually gone up. (For context, the hope in Massachusetts was that less than $200 million would be spent to fund care for undocumented immigrants.)
Second, enrollment has spiked in Medicaid. Since the Obamacare expansion, the cost of the Commonwealth’s Medicaid program has exploded, with costs increasing by $2.9 billion last year alone. With one in four Massachusetts residents now on Medicaid, the price tag is a whopping $16 billion a year, nearly half the state’s annual budget. (For comparison, Utah’s entire budget is only $12 billion.)
Third, despite predictions otherwise, private insurance premiums in the state have continued to rise to the highest in the nation. In other words, even with more people on Medicaid, costs have continued to increase, and those costs are being passed on to Massachusetts families who have private insurance. Reality has trumped idealism once again.
Finally, hospitals in the state have hired even more lobbyists to access additional public taxpayer money to backfill their bottom-line. They have been cut special deals by state and federal lawmakers in the form of billions of dollars of “supplemental” payments, which were supposed to be unnecessary under the Massachusetts law, especially after Medicaid was expanded.
The main fear in Utah is the cost of Medicaid expansion surging higher than expected. The tentative plan proposes hospitals, doctors, insurance companies and pharmaceutical manufacturers picking up the tab. But we all know these costs will be passed onto patients in the form of an indirect tax on the sick.
One certainty is that under Obamacare expansion, numbers will be much higher than anticipated.
According to recent analysis of the 17 states where Medicaid expansion enrollment numbers have been made available, total enrollment has exceeded the projected maximums by 73 percent. Not one single state saw enrollment numbers below projected maximums.
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Utah’s neighbors Nevada, Colorado, New Mexico and Arizona — which all signed up for Medicaid expansion — saw their actual enrollment exceed total maximum projections by 113, 91, 29, and 17 percent, respectively. This outcome in Utah would be a fiscal nightmare for health care providers and patients and would bring fiscal calamity for Utah taxpayers as well.
Utah policymakers would be wise to learn from this expensive Massachusetts experiment. Instead of expanding a broken program, taxing the sick and spending money Utah doesn’t have, they should instead focus on affordable care options for all.
Josh Archambault served as senior legislative aide for former Massachusetts Gov. Mitt Romney and now works for the Foundation for Government Accountability.