Mediciad Expansion – Part II

‎I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.- James Madison

In Medicaid Expansion – Wrong Answer, Part I, I discussed the four main “selling” points for expanding Medicaid.  They are:

  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.

As you can imagine, as many of of these “selling” points are exposed as not being the magic elixir they claim to be, new ones are developed.  We will continue to expose the snake oil remedies as they are given.

Today, we will take a look at the last two “selling” points.

Medicaid Expansion Creates Jobs

This “selling” point is very purposefully designed.  The proponents of Medicaid expansion know that jobs and the economy is the number one issue on people’s minds.  They very astutely commission a study thats appears to indicate what a boon to job creation spending nearly $6 billion (b) of federal money, 40% of which is borrowed, and a few billion of state taxpayer money will be.  Problem is historical experience indicates they are wrong.

A study done by the University of Missouri and an out-of-state company shows that by implemeting this federal stimulus program of expanding Medicaid 24,000 jobs will be created.  The fact that these studies have proven to be notroriously wrong in the past aside, let’s look at this claim.

Who will be creating these jobs?  Many of the jobs will be located in the private sector but they will be paid for by taxpayer using borrowed Chinese funds.  The federal funds for Medicaid expansion along with the state’s portion of funding will be paying for these jobs.  The private sector will not be creating them.  The private sector will not be paying for them just serving as a government agent passing the money through.  The money spent will be taxpayer money and the taxes collected from those jobs will not equal what the taxpayers spend on those jobs.  It’s simply another federal stimulus program gone wrong.

How much credence should we give to these projections?  Experience tells us we should give little to none to them.  These types of economic projections are made on a regular basis. And just as regularly, they prove to be overly optomistic much less accurate.  Can you say MAMTEK?

Here’s a prime example of how these studies are used to support programs that otherwise couldn’t get funded  - Historic Preservation Tax Credits.  When this tax credit was developed, the projections were that over a five year period the credit would cost $71.5 million and for every $1 in tax credit issued, the state would receive $1.10 in return.  Sounds pretty good doesn’t it?

The reality is that over that five year period the tax credits issued were $640 million and it’s costing taxpayers nearly $.77 for every $1 in tax credit issued.  There is absolutley no reason to believe that 24,000 jobs will be created under Medicaid expansion.  In fact, historical experience shows just the opposite!

Medicaid Expansion will result in Better Helathcare Outcomes

Just in case the questionable economic arguments fail to sway you, the proponents also include tugging at your heart strings.  They will talk about the 300,000 people who will be “eligible” for Medicaid under the expansion and how their healthcare outcomes will be improved and that helps us all.  Sounds good but it’s not working that way now with just under 900,000 people on the rolls. How will adding more people to a broken system improve healthcare outcomes? Answer: it won’t.

There is scant, reliable evidence that Medicaid access signficantly improves healthcare outcomes.  This isn’t speculation. Oregon has demonstrated that access to government funded healthcare does not signficantly improve healthcare outcomes but usage and costs absolutely go up.

The proponents also claim that expanding Medicaid will save lives.  The facts show that this is a false claim.  Even when you study Medicare which deals with an older and usually sicker population, the evidence does not support this type of claim.  You can read more about this and other facts here.

Bottom line is that the Obamacare Medicaid expansion is not helpful to those who might be given coverage and it’s not helpful or cost effective for those paying for it.  Adding more people to a broken system will not assist them nor taxpayers.

The Missouri legislature should continue their efforts to reform the existing Missouri Medicaid system making it truly effective for those who are receiving services as well as those who are paying for them.

#2013medicaidexpansion