Republican Medicaid expansion plan has problems, says economist

Now that Republican legislative leadership has advanced a proposal for Medicaid expansion, it is being challenged by an economist from a free-market group.

“The policymakers behind this latest Medicaid expansion plan, I think, seem far less concerned over the failures of the past,” said Michael Austin, an economist with the Sandlian Center for Entrepreneurial Government at the Kansas Policy Institute. “They are probably more concerned on what sounds good.”

Austin, in a blog post, said hospitals will be allowed to generate more revenue from taxes under the proposal.

“This plan will tax hospitals, then it’s going to ask the feds to match that tax revenue and then it will give the tax back to the hospitals,” said Austin. “It bills taxpayers for that entire maneuver.”

The partial Medicaid expansion proposal put forward by Senate Majority Leader Jim Denning has been attempted before elsewhere.

“Instead of covering childless, able to work adults up to 138 percent of the federal poverty limit, we only go up to 100,” said Austin. “It may seem novel, but it’s not novel. Utah, Idaho, Georgia, Massachusetts, Wisconsin, those states to name a few, have all tried to do the same thing. The federal government, abiding by the letter of the Affordable Care Act, says expansion has to be an all or nothing proposal.”

The Center for Medicare and Medicaid Services would have to approve any changes in Kansas’ program. They haven’t approved such changes in these other states. In addition, funding the program
through increases in cigarette taxes likely won’t work, as there are many ways to circumvent such a tax.