The Truth about Medicaid Expansion

The August 4, 2020 election is fast approaching. Everyone is getting bombarded by candidate mail pieces, radio, and TV advertising vying for your vote. United for Missouri doesn’t endorse candidates, but we do encourage you to go beyond the mail pieces and other “paid for by” materials and learn more about the candidates you will be voting for on Tuesday, August 4, 2020.

Regardless of whether you choose a partisan or nonpartisan ballot on August 4^th, you will be asked to vote yes or no on a very significant proposal, a constitutional amendment that would enshrine Obamacare in our state’s constitution.

United for Missouri recommends a NO vote on this issue.

Amendment 2 would place into our state constitution, something that can’t be changed except by another vote of the people, the expansion of Medicaid to what is generally termed as “able-bodied adults” who otherwise make too much money to qualify for the basic Medicaid program.  Other than expanding on an already costly government program, the proposal seems to sound “nice,” but it isn’t.

Medicaid already consumes as much or more dollars, depending on the year, than the state has available to spend on education. The spending requirements to support the existing Medicaid program already competes with the available funds for education in the state. This is especially concerning when you consider that Missouri is already cutting a projected $700 million due to COVID-19 impacts.

Medicaid, including the expansion proposal, is one of those programs that once you start it, there’s very little you can do to get out of it. It’s a bottomless pit consuming more and more and more taxpayer dollars.

The proponents, mainly hospitals with lots of money who want to make lots more money, have raised at last count, $10 million to try to persuade Missourians what a good idea expanding Medicaid is. They tell all sorts of fanciful stories while leaving a lot out.

The reason they leave so much out of the story is they know that if people see the truth about the issue, they will vote NO on Amendment 2!

Let’s address a few of the misleading claims made by proponents.

Misleading Claim #1: “Medicaid Expansion will not cost the state any additional dollars, but will pay for itself.” — FALSE

The proponents have to do many contortions to make this false claim. The fact of the matter is that Medicaid expansion has ALWAYS cost more than the proponents have projected. On average, states have seen seventy-six (76) percent higher costs per person than planned and spent one-hundred fifty-seven (157%) percent more than was anticipated when “selling” the expansion snake oil.

Anyone who tells you this sort of spending will not “cost” taxpayers more money is trying to deceive you.

The Department of Health and Senior Services, the people who administer and are responsible for implementing the state’s current Medicaid program, day in and day out disagree with the rosy projections from the proponents. In the fiscal note, they specifically say that costs will exceed $200 million! In my experience, this estimate is likely too low!

“The expansion of eligibility for Medicaid benefits under the proposed federal program could potentially include coverage for an estimated 250,000 additional Missourians. The costs for this expansion would be in excess of $2 billion per year. The expansion population state match would be at least 10%; however, that match is subject to change as federal law is amended. Depending on implementation requirements from CMS, there could be some costs shifted from state funds to federal funds; however, the cost of implementing this proposal will result in a significant cost in state general revenue. The overall estimated general revenue cost for the implementation of this proposal is estimated to exceed $200 million. (ed note: per year)” (emphasis added)

As of this writing, our U.S. national debt is well over $26.5 Trillion. Debt per citizen is now $80,452 and debt per taxpayer is $213,277. United States federal spending is $6.2 Trillion, and the U.S. federal budget deficit is $2.8 Trillion. The U.S. federal debt to GDP ratio is now 132.52%. In 2000 it was 57.27%. Medicaid/Medicare is the largest federal budget items at $1.3 Trillion. Our Defense budget by comparison is $693 Billion.

Sorry to burst the balloon of the proponents, but there is no such thing as “free government money!”

Misleading Claim #2: “Missouri taxpayers are sending our federal tax dollars to places like New York, California, and other states that have expanded Medicaid.” — FALSE

No one in Missouri wants to be sending their hard-earned tax money to places like New York or California, and the proponents of Medicaid expansion know that, which is why they aren’t truthful in their statements like this.

Indeed, New York, California, and all the states who expanded Medicaid are finding it financially challenging to meet the additional funding requirements brought on by Medicaid expansion. That’s even more true under a COVID-19 economy!

However, it is categorically false that Missouri is sending any of our tax dollars to these or any other state.

Missouri has long been what is known as a “recipient” state. In other words, Missouri receives more federal dollars back to the state than we send into the federal government. Since we get more dollars back than we send, it’s impossible to be sending any of “our” dollars to other states!

Misleading Claim #3: “Medicaid expansion will create jobs and stop the closure of rural hospitals!” – FALSE

The supporters of Medicaid expansion claim that it will create jobs and will boost the bottom line of struggling hospitals especially rural hospitals that are struggling. While the statement may be a good focus-grouped proven statement, it’s not reality.

If Medicaid expansion creates jobs, they would primarily be in hospitals where taxpayer dollars were going to “create” them. Unfortunately for the proponents, the data show the exact opposite.

The data shows that after years of expansion, new hospital jobs are being generated at a faster rate in non-expansion states than the Obamacare states!

Moody’s Investor Service performed an analysis of hospitals’ financial data and found that there was “no significant difference” in those in expansion states compared to those that had not expanded Medicaid.

The supporters of Medicaid expansion often cite data that shows the majority of rural hospitals that have closed are located in non-expansions states. Sounds ominous until you realize they don’t provide any data in support of not expanding Medicaid is the cause of the closings. They merely want to suggest that so that voters believe it is.

Hospitals, including rural hospitals, in states that expanded Medicaid are still closing and experiencing significant financial distress.

The bottom line, Medicaid expansion fails to improve hospitals’ financial condition by any appreciable amounts, and it isn’t the job creator that is it is being sold to be!

Medicare expansion (Obamacare) is not the magic elixir that the proponents want voters to believe that it is. It just adds more problems to an already broken system without appreciably improving the healthcare outcomes for those receiving the services or providing their monies worth for those taxpayers footing the bill!

United for Missouri recommends a NO vote on August 4^th!

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