Over the past several months, pro-Obamacare advocates have successfully placed Medicaid expansion on the November ballot in Idaho, Montana, Nebraska, and Utah by claiming the program will help states balance their budgets and help working adults support their families. In response to these dubious arguments, Lindsay Atkinson of the Idaho Freedom Foundation and I published a detailed report outlining how Medicaid expansion has dramatically increased costs far beyond what expansion proponents predicted and have made it harder for low-income families to climb out of poverty.
Despite growing evidence Obamacare’s Medicaid expansion policies have failed, the liberal Center for Budget and Policy Priorities recently attempted to rebut our report by claiming that even though states have enrolled more individuals than they forecasted, states are only encountering “minimal cost[s].” In particular, they cite a 2017 study in the Journal of Health Affairs that argues Medicaid expansion didn’t make it harder for states to fund critical priorities like schools, highways, and law enforcement.
These claims are false or misleading. For example, the Journal of Health Affairs study only looks at state budgets from 2010 to 2015, when the federal government paid for 100 percent of Medicaid expansion costs. Starting in 2017, states have had to pay for a steadily growing share of the program’s costs, which are quickly adding up.
For instance, in late August, the Kentucky Cabinet For Health and Family Services announced that the state’s Medicaid program faces a $ 300 million fiscal shortfall over the next two years due to Obamacare’s unexpected costs. When former Gov. Steve Beshear expanded Medicaid to able-bodied adults in 2013, he projected only 188,000 would enroll in the program. However, research from the Foundation for a Healthy Kentucky reveal that the Bluegrass State enrolled 650,867, which is more than triple the number Medicaid expansion supporters predicted.
Kentucky isn’t the only state buckling under Medicaid expansion. When Gov. John Kasich, R-Ohio, expanded Medicaid in 2013, he expected the program would cost $ 13 billion in its first seven years and sign up just 447,000. But within the five years, enrollment has skyrocketed to 710,000 and is now expected to cost $ 19 billion. This means there’s less funding available for education, roads, and health initiatives to combat Ohio’s worsening opioid crisis.
These numbers shouldn’t surprise anyone. Even before Obamacare, Medicaid’s ballooning costs made it increasingly difficult for states to fund core public responsibilities. In May, the education journal EducationNext published new analysis from Temple University economist Douglas Webber that found that since 1987, every $ 1 increase in public welfare spending, which is primarily comprised of Medicaid, is directly responsible for a $ 2.44 decrease in state funding for higher education. Webber concluded, “Medicaid has been the single biggest contributor to the decline in higher-education support at the state and local level.”
But Medicaid’s fiscal costs aren’t the only thing CBPP gets wrong when it comes to Obamacare’s expansion. The group also argues Medicaid expansion makes it easier for the program’s enrollees to find and maintain employment, citing surveys from Michigan and Ohio, but neither of these surveys show Medicaid is helping individuals attain employment. Both surveys only analyzed the employment status of less than 6,000 Medicaid enrollees. And even if we were to take these questionable findings at face value, both show 28–50 percent of Medicaid’s able-bodied enrollees in those states do not work at all.
Medicaid, like most welfare programs, penalizes individuals who make too much money. Because Medicaid’s benefits phase out if an individual earns more than 138 percent of the federal poverty level, the program effectively discourages enrollees from working their way out of poverty.
In 2016, researchers at Georgetown University found that states that expanded Medicaid saw their share of working adults fall by up to 3 percent compared to states that decided not to expand. This means Medicaid expansion leads to higher unemployment, lower incomes, and declining physical and mental health for individuals pushed out of work.
Despite the claims of Obamacare’s advocates, voters in November should remember Medicaid expansion has been a disaster for taxpayers and working families. The program has blown gaping holes in state budgets, cannibalized core public services many of us rely on, and has made it harder than ever for low-income families to pull themselves out of poverty.
Charlie Katebi is a state government relations manager at The Heartland Institute, a nonprofit, nonpartisan public policy think tank.