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MT Legislature Made Right Decision on Medicaid

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By Sen. Fred Thomas

With the growing federal deficit and the need to raise the debt ceiling once again looming large, it has become clear to many of us that the Legislature was right to reject the Obamacare Medicaid expansion.

While the debate was going on, we heard the same set of claims – put forward as if they were facts – over and over again. Obamacare Medicaid would give 70,000 Montanans health care. Obamacare Medicaid would create 12,000 new jobs.

Despite all those claims, Legislators rejected the Obamacare Medicaid expansion. We were rightly concerned that government welfare programs spend a lot of money but do not have a good track record of actually helping people. Now, we have been proven correct. 

A new study performed in Oregon, and published in the New England Journal of Medicine, reports some shocking facts about the Medicaid. Let's cut directly to the central finding.

The cost of care for patients who receive health coverage through Medicaid is comparatively more expensive than those that have private insurance.  Yet those Medicaid patients have the same health outcomes as those who have no health coverage at all.  Put more simply, we’re spending a lot of taxpayer money and getting absolutely no result.

The exact words used by the scientists who conducted this study were, “This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured health outcomes in the first two years.”

However, say the study authors, those who received Medicaid from the government increased annual health care spending by $1,172. That represents a 35 percent increase over those who did not receive Medicaid. In other words, the situation is exactly as we feared during the legislative session. The Obamacare Medicaid expansion spent more money but did very little to help people—which, taking into consideration our current fiscal conundrum, spending money inefficiently is the last thing we need. 

This makes the Obamacare Medicaid expansion seem less like “free health care” and a lot more like yet another  bloated federal bureaucracy that will do nothing more than perpetuate the vicious cycle of unaccountable government spending, rather than focusing on how to contain healthcare costs and promote efficiency throughout our healthcare system.

Another claim was that currently people with no health coverage simply go to emergency rooms, which increases costs for hospitals. Hospitals then pass those costs along to the paying patients, and that results in higher costs for all of us. We were told the Obamacare Medicaid expansion would solve that problem, but the Oregon study disagrees. The scientists who wrote the study said they “did not find significant changes in visits to the emergency department or hospital admissions.”

Potentially a far larger problem with the Obamacare Medicaid expansion was the hole it would blow in our balanced budget. Currently the revenue of state of Montana is estimated to grow by $318.8 million from the current biennium of to the next. So we expect to have $318.8 more in 2014-15 than 2012-13. This is what provided the revenue to increase our local school K-12 funding, University System and Health and Human Service programs.

The Obamacare Medicaid expansion is expected to cost $179.3M in the biennium of 2018-19 and $281.7M the next.

If we were to have expanded Medicaid we would have committed up to 88 percent of the current revenue growth to this Medicaid expansion cost. That would have eliminated the funding increases we were able to provide for our local schools K-12, University System and Health and Human Services.

Current estimates are that 70,000 Montanans could be eligible for the Obamacare Medicaid expansion, or 7 percent of our population. It is estimated that 25 percent of this 7 percent are insured now. That leaves five percent for the program, and it is estimated that less than 100 percent will sign up for expanded Medicaid.

In other words, we would cripple our whole state budget for only about four percent of the state’s population!

As legislators, we’re faced with the difficult task of balancing priorities. Of course providing health care to those who can’t afford it is a priority—but so is funding schools and keeping existing programs that we know work.

In light of the national negotiations over the government shutdown in which Obamacare is being used as a bargaining chip, the recent failure of Obamacare to provide an easy-to-access method to purchase healthcare, and the high degree of uncertainty that the President’s new healthcare law has introduced to the insurance industry, it seems to becoming increasingly clear that our state legislature made the right choice on doing all we could to avoid the implementation of this costly plan. 

Senator Fred Thomas represents Senate District 45 in the Montana State Legislature. He is currently serving on the Revenue and Transportation legislative interim committee and during the legislative session, was a member of the Fish & Game Committee, the Public Health, Welfare, & Safety Committee, the Rules Committee, and served as Vice Chair of the Taxation Committee.