May 7 2013

Medicaid: Don't Expand a Broken System

Hadley Heath

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The Affordable Care Act (ObamaCare) was passed in part to reduce the number of Americans without health insurance.  One of the primary ways ObamaCare would accomplish this is by expanding Medicaid—the program that currently provides insurance to low-income Americans—so more Americans are eligible. 

The original law sought to compel states to expand their programs (or face the threat of losing all federal funding for Medicaid).  However, in 2012, the Supreme Court ruled that the federal government can’t force states to expand Medicaid.  Since then, states have grappled with a decision: Should they take generous but short-term federal funding to expand Medicaid, or should they avoid the expansion altogether?

As Americans consider this debate, it is important to understand the current state of Medicaid.  As it is today, Medicaid is expensive and rife with problems.  Approximately 58 million people have insurance through Medicaid, but the quality of health care they receive is substandard, sometimes even worse than care for the uninsured.  Medicaid already takes up nearly a quarter of the average state budget, competing closely with K-12 education for state dollars.

Past expansions of Medicaid show that states often end up spending far more than anticipated, and do not increase the rate of people with insurance.  Instead, expanding the program moves people from private insurance onto government rolls.  Instead of expanding a broken program, lawmakers should reform Medicaid to make it more patient-centered and market-based. 

Click here to read the rest of this 6-page policy focus in PDF.

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