Medicaid Expansion Not Necessarily Positive For Health, Says Sandlian Center Economist

Michael Austin, an economist with the Sandlian Center for Entrepreneurial Government at the Kansas Policy Institute said in a blog post that evidence shows those who Medicaid expansion is supposed to help don’t necessarily get that help, at least when it comes to health outcomes.

“There have been two studies from the National Institutes of Health that found that Medicaid patients were at greater likelihood to develop complications, or even pass away, relative to those under private insurance,” said Austin. “In 2013, there was a study done by the New England Journal of Medicine that found expansion coverage generated no significant improvement in physical health outcomes even though there was an increase in health services that were used.”

There’s also the issue of pitting current Medicaid patients at a 57 cents on the dollar reimbursement rate against Medicaid expansion patients who would, until 2020, get a 90 cents on the dollar reimbursement rate with a limited number of medical providers who take Medicaid patients across the state.

“If you had two patients, who are not on any waiting lists, hospitals may be inclined to better accept a Medicaid expansion patient because of that higher reimbursement rate than they would for under traditional Medicaid,” said Austin. “That’s not the only thing you’ve got to prepare for. You also have to think about the state budget and the state resources for those that are truly needy.”

The point is that even if the state is only spending a dime of every dollar on Medicaid expansion, that dime, unless there is a corresponding revenue increase, is going from those with the lower reimbursement rate to those with the higher and siphoning off those resources.

“We’re talking about, let’s say, traditional Medicaid recipients,” said Austin. “That’s those that are disabled, pregnant women, children, we find that they actually risk seeing worse outcomes. The reason why, is because, while they are on waiting lists and a state expands Medicaid, there are less state resources that can go towards them. That’s not an opinion. This was actually in the 2016 Health and Human Services department report.”

According to testimony from the Kansas Health Institute to the Health and Human Services committee, in Kansas, half of those who would use Medicaid expansion dollars already have private insurance.