As former head of the Maine Department of Health and Human Services, I was invited recently to testify before a Utah legislative committee on the unintended consequences of Medicaid expansion.
My warning to the committee was simple: Beware of expanding Medicaid beyond its original scope; the ones hurt most will be those who are in greatest need.
In Maine, we learned these lessons the hard way. Maine expanded Medicaid several years before the Affordable Care Act. When I took over, nearly a third of Maine’s population was on Medicaid and the program was running a $750 million deficit. Unpaid hospital bills racked up month after month. Nursing facilities had closed, many physicians had stopped accepting Medicaid patients and the most vulnerable — seniors and individuals with disabilities — were left languishing for needed services.
Only by rolling back earlier expansions were we able to restore funding for nursing facilities and home care reimbursement to care for the people Medicaid was intended to serve. In short, we were able to return our priorities to what they were intended to be.
Medicaid was designed to provide health care and critical services to seniors, poor children and individuals with disabilities. These are the enrollees with the greatest needs, primarily seniors, individuals with disabilities and individuals with severe and persistent mental illnesses. Think of the 78-year-old woman with dementia, diabetes, cardiovascular disease and limited mobility, desperately needing nursing facility care. This is who Medicaid was intended to serve.
The ACA’s Medicaid expansion would change all of that. Medicaid expansion would add a new class of able-bodied adults to the program. These are adults in their prime working years with no disabilities and often no children. Ultimately, the truly needy will suffer most when these able-bodied adults move to the front of the line.
Expansion boosters argue that Medicaid expansion is practically free, generating a windfall of federal funding. They claim more funding will provide an economic boost, saving hospitals and creating jobs. But all the promises prove to be hollow.
Thirty-one states have expanded Medicaid programs under the ACA. A common theme has emerged: costs soaring far higher than expected, leaving fewer resources for the most vulnerable and crowding out funding for all other priorities.
States that opted into the expansion are scrambling to find funding to cover large and growing expansion cost overruns. In Colorado, more than twice as many able-bodied adults signed as the state expected, leading to a billion-dollar overrun in just the first few years. In California, four times as many people signed up for the expansion as the state initially projected. Instead of costing taxpayers the promised $11 billion over the first three fiscal years, the actual bill came in at $44 billion.8 comments on this story
Medicaid expansion causes many problems, but these are the most prevalent. It robs resources that could go toward the truly needy. It crowds out funding for all other state priorities, including education, roads and public safety. And it leaves states holding a bigger bag when federal subsidies are eventually reduced.
States like Maine and Utah must balance their budgets. With limited resources, safety net programs must fulfill their core mission. Maine fell into the same trap as many other states of expanding Medicaid rolls while the very real needs of seniors and individuals with disabilities went unfunded and unmet. I can only hope Utah will not have to learn these hard lessons the same way.