Medicaid Expansion – Part I

The debate on whether the General Assembly should expand Medicaid is heating up.  The Governor and supporters of big government spending are crisscrossing the state trying to make the case for expansion.  Unfortunatley, most of what I hear them saying isn’t accurate.  The old adage “if sounds too good to be true it probably is” aptly applies here.

The “selling” points seem to be grouped into four main areas:

  1. The federal government will be funding it for “free” for the first few years.
  2. Missouri’s Medicaid money will be spent in another state if we dont’ take it.
  3. Expansion will create jobs.
  4. Better healthcare outcomes will result when more people have access to government provided healthcare.

In some cases, the arguments are outright false and in others, they are very misleading!

Free Money

Whenever you hear this one you should have the compulsion to grab your wallet and run away as fast as possible!  Here are the basics.

Federal money is not “free” money.  Taxpayers provide federal money period.  Even if it’s borrowed Chinese money taxpayers pay it back.  Missouri is projected to receive approximately $5.7 billion (b) in “free” money.  We know that around $.40 of every dollar is borrowed. So not only will taxpayers pay the $5.7b plus the state match that will be needed – projected to be between $1b and $3b, we will also be paying the interest on that “free” money.  Anyone who believes this is a good deal needs to take an intensive credit counseling course!

Fact is if Missouri does not expand Medicaid the federal deficit and debt will be that much less.  So far, a handful of states have said no to Medicaid expansion.  The CBO estimates that those states who have refused to expand Medicaid have reduced federal deficits by $84b. The states that are refusing to expand Medicaid are doing more to reduce federal deficits than Congress and the president.  Missouri should join that group in reducing the federal deficit!

Missouri’s “Share” will go to other states

This is the most outlandish claim of them all.  The Governor made a statement in the state of the state address “…will we let the tax dollars that Missourians send to Washington be spent in other states instead? Other states would get the benefits, and we’d get the bill.”  When queried about what exactly was the Governor basing his statement on, his staff replied “Missourians pay federal taxes.  Those federal taxes are used to fund federal programs, such as Medicaid.”  Sounds good but doesn’t hold up under scrutiny.

Medicaid is not just “given” to states.  People have to be enrolled, services provided etc. in order for the federal government to provide Medicaid funding.  The cold hard fact is that if any other state enrolls and provides services to more people than was projected, they will receive MORE Medicaid funds from the feds whether Missouri expands Medicaid or not.  That money would not come from Missouri’s “share” because we did not expand Medicaid.

As far as paying for those people in other states – you already are.  Every Missourian who pays federal taxes pays for the funds expended by the federal government everywhere, not just in our state.  We are currently paying a portion of California’s Medicaid program through our federal taxes.  This will not be any more if Missouri doesn’t expand Medicaid.  In fact, as indicated earlier, the federal deficit and our share of it would be less if more states refused to expand Medicaid!

The Governor rightly knows that nobody really wants to pay anybody else’s bill especially if they get nothing for it.  However, his basis is all wrong and it’s just a political ploy to convince people to accept more state and federal spending.  I don’t know about you, but I would like the Governor Nixon who was there before the election to come back! The new, big spender Governor Nixon isn’t going to work out very well for Missouri.

We will address the remaining “selling” points in another blog.  If you get the opportunity, please encourage your representative and senator to just say “NO” to Medicaid expansion.  In the near future, we will be giving you an opporutinty to do just that!

#2013medicaidexpansion