Florida's Republican Governor Rick Scott has been a leading opponent of ObamaCare, yet this week he came out in favor of expanding Medicaid in his state through the Affordable Care Act. The reasoning is it is "free money" or "money left on the table if we don't expand" or a "job creator" or expansion will "hold down health care costs." These are all faulty reasons at their worst.
The bottom line is Medicaid expansion is a bribe from the federal government.
The existing Medicaid program began in 1965 as a safety net health insurance plan for poor children and their families. In 1975, 10 percent of the country was in Medicaid. Last year, 20 percent of the country had Medicaid as their health insurance. Funding of the program is a 50/50 split between state taxpayers and federal taxpayers. Federal taxpayers will pay for 100 percent of the expanded Medicaid program for the first three years and after an additional three years, federal and state taxpayers will split the cost in a 90/10 ratio. Hence the idea that this is "free money" from the federal government and states would be foolish to turn it down.
Of course, state taxpayers are also federal taxpayers, so the entire bill ultimately falls upon all taxpayers. The federal government is in debt $16 trillion and unless it raises taxes substantially or borrows much more, the 90/10 split is very likely to change and put a greater burden on states.
It sounds great that so many people will obtain health insurance, yet the reality and tragedy is Medicaid is terrible insurance. The program is poorly managed and inefficient to the point where providers are paid 40-50 percent of what private insurance pays them. This has made health care access a serious problem for our existing Medicaid patients. Adding 20 million more people nationally and 500,000 more people in Washington state will only make this access problem much worse. Doctors and hospitals will continue to cost shift to cover their expenses and consequently health insurance premiums for privately insured patients will continue to go up.
Unfortunately health outcomes, except for very specific patient groups (AIDs/HIV), are actually worse with Medicaid than not having any insurance. (Here) Expanding Medicaid will trap millions of low income people in a terrible insurance program.
Many low income people will also loose their employer-sponsored private insurance as employers save money and drop employee health benefits.
At least 18 states currently plan to opt out of the Medicaid expansion. These states are demonstrating fiscal responsibility and showing more compassion for the poor than the states that have taken the ObamaCare bribe.