It has been six years since the sweeping healthcare legislation “Obamacare” passed. In that time states have grappled with the prospect of instating their own exchanges to cover all adults living within 138 percent of the federal poverty line. The feds have dangled 100 percent matching funds until 2016 and 90 percent after that for the states that expand Medicaid. Thus far, 32 states have taken the bait, including Arizona. And as many of the critics predicted, expansion has failed to deliver on any of its promises and has now trapped states into a fiscally unsustainable program.

Higher than Expected Costs

The financial architecture of the Medicaid expansion was predicated on a larger pool of new enrollees being cheaper than that of current Medicaid members. This premise has proven to be a complete miscalculation. According to a recent report by the Department of Health and Human Services, new ACA enrollees cost an average of $6,366 annually, 49 percent higher than their initial predictions. Apparently not factored into the costs were the states’ response to economic incentives – given the feds were flipping the bill – most states have exceptionally high capitation rates. This economic fact never changes, if someone doesn’t have to personally pay for it, they will spend more. This apparently applies to states as well as individuals. Once again, the government has under-estimated the costs of their healthcare bureaucracy.

Lower than Expected Benefits

Proponents often cite the metric of new insured individuals as the evidence of Obamacare’s success. There is no debate here. Without a doubt, under penalty of a fine, more people have insurance. However, the data surfacing reveals a deeper truth about the healthcare law. A study conducted by economists at MIT found every one dollar of government spending on Medicaid resulted in 0.20 – 0.40 of benefit to Medicaid recipients. Not only are the costs ($425 billion in 2011 alone) to fund Medicaid extraordinary, but the efficiency of those dollars are so low, one must ask the question, what are we even paying for?

This corroborates what past studies have already demonstrated. In 2008, Oregon conducted an expansion of its Medicaid program, prior to the advent of Obamacare. What was deemed as “The Oregon Experiment” showed simply insuring more individuals did not correspond to improved health outcomes for those individuals. And yet we continue to dump more dollars into a system which does not deliver the health results for Americans.

Competition is Disappearing

Even with high capitation rates, private insurers are losing money on ACA plans. The gorilla of private insurance, UnitedHealth Group, reported $200 million in ACA losses just in the second quarter of this year. They are pulling out of most state exchanges. Anthem is in the midst of acquiring Cigna Corp, they are threatening pulling out of the exchanges, should the feds stymy their merger plans. Centene who recently acquired HealthNet, is facing structural financial woes as HealthNet has suffered extreme losses of its ACA plans. Humana too is fleeing many of its exchange plans. Aetna anticipates $300 million in losses on marketplace plans this year and has since stalled plans to enter into new markets. Many of the Blue Cross Blue Shield Insurers are losing money in exchange states as well.

One fact is for certain, the private insurance industry is bleeding out in the public exchange market. As higher risk consumers flood the exchange and low-risk, healthy consumers hedge their bets with no insurance, private insurers are either cutting their losses or eliminating popular PPO plans in lieu of thin network, high deductible and co-pay plans as well as higher premiums. In rural areas, like Gila County in Arizona, the lack of choice is particularly acute. This obvious crisis of competition is spurring the Obama Administration to call for Congress to develop its own public plan. What could possibly go wrong with that?

The deficiencies of heavily subsidized public healthcare systems are well documented. In the 1990’s several states tried their hand at developing their own state systems. They provided “guaranteed issue” and “modified community ratings” which eventually led to the squeezing of the individual health market, the decline in the number of private carriers, and eventually a bust of the system over all. Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, New York, Vermont, and Washington have all been down this road before; all have suffered the same obvious disastrous results. Furthermore, though the Obama Administration and supporters had a rosy outlook of the Medicaid expansion effort, critics at the time were spot-on accurate with the consequences we are seeing today.

At the end of the day, the failings of Obamacare and Medicaid expansion should be a surprise to no one.

“Medicaid was designed as a safety net for our nation’s poorest and sickest people,” Rep. Joe Pitts, R-PA, chairman of the Energy and Commerce Health Subcommittee, said during a hearing on March 18, 2013. “States are already struggling to serve this core population.

“Increasingly, doctors simply can’t afford to treat Medicaid patients. Is it fair that the president’s health care law will force millions of disabled and sick Americans to compete with able-bodied 25-year-olds for appointments with those doctors who will still see them?”

• 1/11/2016: Here is what others are admonishing nationally about Matt Mead’s intent to Expand Medicaid in WY.
  Matt Mead’s intent to Expand Medicaid in WY
• Ignoring his legislature, Wyoming Governor Matt Mead pushes for Medicaid expansion
• Medicaid Expansion-There Is No State Law Trigger to Exit (Robert Alt – The Buckeye Institute)
• Montana’s Medicaid Expansion Program Over Budget On Day 1

Kasich’s (Ohio) Medicaid expansion has cost taxpayers $7 billion

Ohio’s Obamacare expansion has already run $3.1 billion over budget and is on track to run nearly $8 billion over budget by the end of next year,” Jonathan Ingram, research director at the free-market Foundation for Government Accountability, told Watchdog.org. “Finding the funding to pay for those overruns will mean fewer resources for education, public safety, and care for the most vulnerable,” Ingram said. Obamacare expansion spending already dwarfs the monthly budgets of many state programs; disbursements for the Ohio Department of Rehabilitation and Corrections, for example, totaled $100 million in February. Ingram noted that changes to the state’s Medicaid eligibility determination process will soon bump thousands of disabled Ohioans from the Medicaid rolls, while 670,000 able-bodied, working-age adults are enrolled under Kasich’s Obamacare expansion. http://watchdog.org/259967/kasichs-obamacare-expansion-cost-taxpayers-7-billion/

Update: Ohio’s Obamacare expansion: Ohio Medicaid expansion costs sailed farther past Gov. John Kasich’s projections in March, as total spending on the program topped the $7.5 billion mark

Expansion cost $411 million last month, making March the most expensive month yet. For the past six months, expansion costs reported by the Ohio Department of Medicaid averaged $394 million — dwarfing other state programs.
Kasich’s budget office reported $312 million in primary and secondary education expenditures, $186 million in higher education expenditures, and $170 million in justice and public protection expenditures in March. The governor predicted that adding working-age adults with no kids and no disabilities to the Medicaid rolls under the 2010 federal health law would cost $14 billion from 2014-20. Actual spending puts Kasich’s Obamacare expansion on track to cost $28.5 billion by 2020.

The following links will provide more information based on actual experience with Medicaid expansion:

HOSPITALS

• WSJ: ObamaCare’s Medicaid expansion hasn’t benefited nonprofit hospitals in those states as expected, according to a new report by Moody’s Investors Service.
• American College of Emergency Physicians: A recent survey of ER physicians shows that emergency department use was on the rise, despite the goal of Medicaid expansion to prevent that.
• Pittsburgh Post-Gazette: After Pennsylvania expanded Medicaid last year, uncompensated care for the state’s 171 acute care hospitals increased by $22 million.
• MinnPost: Unpaid hospital bills have gone up by $80 million per year, after Medicaid expansion.
• Moody’s: Hospitals in Medicaid expansion states were supposed to benefit from fewer unpaid bills and more paying customers, but that hasn’t generally translated into better margins or cash flow. In the fourth quarter of 2014, hospitals in non-expansion states actually improved their operating margins by 1.3 percentage points, while those in expansion states saw an improvement of only about 0.9 percentage points,
• UC Davis: Medicaid expansion states will still feel DSH cut pain (and DSH cuts don’t start until 2018).
• Arkansas City Wire: Arkansas Children’s Hospital and UAMS found they were being paid only 82% of costs and lost $83 million treating Medicaid patients. Those payments are paid quarterly, but it’s often six months before the hospital sees the money.
• Louisville Courier-Journal: Kentucky hospitals say ObamaCare is forcing them to make cuts and layoffs; they say they’ll lose money under the Affordable Care Act than they gain in revenue from expanded coverage. This, after they had the second-largest drop in the uninsured in the country.
• Kaiser Family Foundation: The headlines are about patient visits in comparing expansion states to non-expansion states, but there is a different story when it comes to revenues. the hospitals actually have better revenues in the non-expansion states. Expansion changed the payer mix, more Medicaid, but less income from commercial and self-pay which pay better than Medicaid as we well know. Expansion probably, though the paper does not examine, caused some erosion in employer sponsored as well.
• Washington Post: Economy is boosting hospital revenue in non-expansion states.
• Becker’s Hospital Review: Financial gains from ACA slowing; will affect smaller hospitals.
• Modern Healthcare: Virginia’s hospitals improving by 37%; for LifePoint, revenue at its six VA hospitals beat its nine KY hospitals in a MedEx state.
• Charleston Daily Gazette: Medicaid hospitals still facing big losses after expansion.
• KALB: Even with MedEx, Louisiana’s hospitals will still close.
• Arkansas Business: UAMS, AR’s largest hospital, still facing huge losses after Medicaid expansion.

RED-STATE EXPANSIONS

• Modern Healthcare: Modern Healthcare notes that similar cost-sharing demonstrations in Arkansas, Indiana, Iowa, and Michigan have actually netted little revenue thus far.
• Arkansas Online: The Arkansas Private Option reports that more than 250,000 Arkansas have enrolled in that state’s Medicaid expansion … more than state officials even thought were eligible for the program.
• Watchdog: Ohio’s Medicaid expansion now $1 billion over budget..
• Arkansas Online: The Private Option has now thrown off 48,000 enrollees due to unverified eligibility.
• Arkansas Business: Arkansas’ Private Option benefits AR’s largest insurers.
• Bismarck Tribune: North Dakota’s Medicaid expansion now have cost overruns of more than $5 million.
• AP: 70% of Arkansas parolees have now signed up for Medicaid expansion.
• McKnight’s: New Hampshire cutting nursing home funding because of Medicaid expansion (while neighbor Maine has increased nursing home funding two years in a row).
• Benefit Revolution: Nevada’s Medicaid expansion has led to double the enrollment and two-month wait times in Reno.
• Associated Press: New Mexico legislators worry about rising Medicaid expansion costs.
• Arkansas Times: Asa proposing $400M in cuts to truly needy to pay for PO.
• KTVA: Alaska DHSS proposing $90M in Medicaid cuts after expanding Medicaid; admits it only “gains” $10M with Medicaid expansion.
• Healthcare Dive: Kentucky’s Medicaid expansion not sustainable, official claims.
• Albuquerque Journal: After experiencing record ObamaCare Medicaid expansion enrollment, NM is looking at provider rate cuts and other measures to make up a nearly half-a-billion dollar shortfall. By July 2017, NM now projects that half of its state population will be on Medicaid.
• KPAX (Montana): Montana MedEx has signed up 36k people as of March 10, 2016 — more than the Bullock administration thought would sign up through mid-2017.
• Lexington Herald-Leader: Kentucky cutting services for brain injury patients after MedEx.
• WV Public Radio: West Virginia’s MedEx is straining the budget and contributing to the deficit.

OTHER NEWS

• U.S. News & World Report: Jails and prisons across the country are “aggressively enrolling” inmates in ObamaCare’s Medicaid expansion, according to U.S. News & World Report. To pay for ObamaCare, seniors’ Medicare will sustain cuts of $716 billion.
• Politico: Medicaid enrollment under Obamacare is skyrocketing past expectations, giving some GOP governors who oppose the program’s expansion under the health law an “I told you so” moment.
• Forbes: Reported that Medicaid enrollees receive very little benefit from each dollar spent on Medicaid. The absolute minimum enrollees receive is 15 cents of benefit per dollar spent. The authors’ best guess is that enrollees receive somewhere around 20-40 cents of benefit per dollar spent. The maximum is 90 cents–that is, no matter how the authors sliced the data, Medicaid’s costs exceed the benefits to enrollees. If the government just gave enrollees the money, Medicaid is such a bad deal that enrollees would not buy Medicaid coverage with it.
• Forbes: Obama Administration admits that Medicaid expansion is costing way more than expected.
• NYT: Half of doctors listed as serving Medicaid patients are unavailable.
• Watchdog/Mercatus: MedEx steals from other priorities.
• Governing: Having affordable health insurance can improve people’s health, but only if a state’s health-care system actually works. The new study present results from a small project in Ohio that made extensive use of electronic health records to allow for information sharing, along with team-based primary care and nurses acting as coordinators across the system.
• KHN: California Medicaid patients with cancer fare far worse.
• Breitbart/Heritage: Nearly all of the coverage gains from the ACA were from Medicaid expansion.
• Benefits Pro: Private insurers win big from Medicaid expansion.
• SF Chronicle: CT hospitals sue over “unconstitutional” provider tax that CT used to pay state’s share of MedEx costs.

JOBS/ECONOMY

• American Action Forum: Medicaid expansion will not stimulate the economy or create jobs.
• Modern Healthcare: Economists find no evidence that Medicaid expansion adds healthcare jobs.
• NEJM: Harvard economists debunk the myth that expansion will create more jobs.
• Valuewalk: States that have expanded Medicaid are experiencing slower job and economic growth
• WDRB: KY Gov. Steve Beshear claimed MedEx created 12,000 jobs, but that hasn’t materialized. As part of that figure, Beshear claimed that hospital jobs would grow by more than 3,000 — but in reality, hospitals jobs declined by 2,660.

Wyoming politicians, who support Medicaid Expansion, advocate for expansion saying that (1) the federal government will grant Wyoming a “trigger” which will allow Wyoming to shut down the expanded portion of Medicaid if the “trigger” is reached, and (2) if Wyoming does not expand Medicaid the money hardworking Wyoming taxpayers sent to Washington will be given to states that do expand Medicaid. Neither justification for expansion is accurate.

…to learn more of how the Country/States have experienced Medicaid expansion follow this link.

The Federal Government does not grant “triggers” and there isn’t a pot of money earmarked for Wyoming that, if not used, will go to another state. The money sent to states that expand Medicaid has to be printed. Our federal government’s growing debt (now approaching $20,000,000,000,000 http://www.usdebtclock.org/ is not sustainable.
Please go to this link for more specific information.

Now that some time has passed for states that expanded Medicaid, what was to be the panacea for them is proving to be anything but. Here are just a few examples:

• The actual % of people who are insured is going down…see here the Louisiana overrun with enrollments
• Medicaid patients receive severely limited access to doctors and health care, ultimately leaving them with worse health outcomes. http://www.cato.org/publications/commentary/obamacares-medicaid-expansion-limits-medical-choices
• A recent survey of ER physicians show that emergency department use was on the rise, despite the goal of Medicaid expansion to prevent that. http://newsroom.acep.org/2014-05-21-ER-Visits-Up-Since-Implementation-of-Affordable-Care-Act
• Uncompensated care for Pennsylvania’s 171 acute care hospitals increased by $22 million (http://www.post-gazette.com/business/healthcare-business/2015/05/21/Many-Western-Pennsylvania-operating-in-the-red/stories/201505210072) and in Minnesota unpaid hospital bills have gone up $80 million https://www.minnpost.com/glean/2015/06/unpaid-hospital-bills-havent-decreased-medicaid-expansion
• Under Medicaid and Medicaid Expansion if you are diagnosed with cancer, the Medicaid system will determine if your cancer is worth treating. That’s right folks. You will have government insurance, but get a cancer diagnosis, and if the treatment cost numbers do not add up correctly, your cancer will not be treated. Effectively, your “free full coverage” Medicaid insurance will not pay for life saving treatments if you need them. See CA article here

You may recall Ohio’s Governor, John Kasich, visiting Cheyenne a couple of years ago encouraging Governor Mead and our state legislature to expand Medicaid. Here is an update on Ohio: Kasich’s Medicaid expansion has cost taxpayers $7 billion http://watchdog.org/259967/kasichs-obamacare-expansion-cost-taxpayers-7-billion/

…Update: Ohio’s Obamacare expansion: Ohio Medicaid expansion costs sailed farther past Gov. John Kasich’s projections in March, as total spending on the program topped the $7.5 billion mark

Expansion cost $411 million last month, making March the most expensive month yet. For the past six months, expansion costs reported by the Ohio Department of Medicaid averaged $394 million — dwarfing other state programs.
Kasich’s budget office reported $312 million in primary and secondary education expenditures, $186 million in higher education expenditures, and $170 million in justice and public protection expenditures in March. The governor predicted that adding working-age adults with no kids and no disabilities to the Medicaid rolls under the 2010 federal health law would cost $14 billion from 2014-20. Actual spending puts Kasich’s Obamacare expansion on track to cost $28.5 billion by 2020.

What we need in Wyoming is a Wyoming solution not a one-size fits all federal government program which has only created more issues and rising costs for the 32 states that signed on.

A Wyoming physician designed an excellent Wyoming based program which he proposed to our legislature. Why then have we only been told about the federal government’s solution?