Is Obama hurting the poor by expanding Medicaid?

By Josiah Cantrall
Special Guest Perspective for the MacIver Institute

Rest assured, regardless of the U.S. Supreme Court’s recent decision on Obamacare, Wisconsin and numerous other states will not be implementing the controversial law anytime soon. Governor Walker has said the law will “devastate Wisconsin,” and he hopes the November elections will make compliance unnecessary.

One of the law’s biggest components was the mandatory expansion of Medicaid to cover people 133% inside the poverty line. This measure alone was expected to add 17 million new people to the program. Childless adults are one example of those who qualify under the expansion, but not under current guidelines. With the Supreme Court over-ruling the mandate, states are now free to opt into the expansion. Opting in, however, will directly lead to worse care for the poor, ironically the very people Obamacare was allegedly created to assist. David Thornton of the Examiner explains it best, “Medicaid coverage no longer guarantees access to health care.” The problem is simple, doctors are losing money. National statistics show reimbursement rates are so low that one in three doctors refuse to accept new Medicaid patients and one in four won’t see them at all.

If the government continues to lower rates and short practitioners, Medicaid patients will find it even more difficult to find doctors. A sudden massive expansion of the program would see millions of new Medicaid enrollees without any additional doctors willing to treat them. Longer wait times and reduced coverage would immediately become reality and health-care would look like the old idiom with a slightly different twist: too many patients and not enough doctors.

So what’s the trade-off for destroying the quality and speed of health-care for the poor?

Incredibly, 46% of Wisconsin residents who would receive benefit under Obamacare already have health insurance.

Critics see the expansion of Medicaid as a back door method to implementing universal government run healthcare. By taking the next step and lifting income and age requirements, every American would instantly be eligible for coverage. In order to fund any substantial expansion of Medicaid, states will either have to heavily raise taxes or severely cut services. Once again the poor would bear the brunt of these changes.

In Wisconsin, even with both federal aid and tax credits, Obamacare would cost the state $433 million for the years 2014 through 2019. That’s an incredible price tag especially considering 91% of Wisconsin residents already have health insurance. Not to mention Governor Walker committed an additional $1.2 billion to Medicaid in the state’s latest budget. An actuarial study commissioned by Walker’s Democratic predecessor found once implemented, Obamacare would cause employers to immediately drop 100,000 people from their insurance rolls. An additional 150,000 people would stop buying private sector health insurance and instead become dependent on the government.

In simplest form, insured individuals would be forced off their current policies and flood programs created exclusively for the poor. Medicaid was created to be a last-resort safety net program for the disadvantaged, not a mechanism to squeeze the government’s health care competitors out of business.

Even if politicians find this morally acceptable, states simply don’t have the funds. Despite the largest Medicaid funding increase in state history, Wisconsin still can’t afford proposed Medicaid expansions. Other states are even worse off financially.

Ironically, a program created for the poor has been put at risk by legislation that was supposed to help…THE POOR! Thanks to the Supreme Court, states have been empowered to make their own decision on this matter.

When the President first touted his health-care legislation, he asked politicians to be compassionate and assist the poor. Those dedicated to this vision may find the first step is to opt out.