This post originally appeared at https://will-law.org/new-report-medicaid-expansion-could-lead-to-lower-quality-at-higher-costs/
The News: The Wisconsin Institute for Law & Liberty (WILL) released a new report, “Wisconsin & Medicaid Expansion: A Prescription for Failure,” illustrating the empty promises and higher costs that would result from Governor Evers’ call to expand Medicaid. While this policy has been tried in many states, our report highlights a multitude of negative side effects.
The Quotes: WILL Policy Associate, Miranda Spindt, stated, “Expanding Medicaid is a Trojan horse for higher costs without the promise of improved care. Wisconsin would be better off finding ways to lower health care costs by reducing government intervention, and by allowing innovation to improve the quality of care for all Wisconsinites.”
Our Findings: While there are short-term financial incentives to expand Medicaid, the long-term fiscal and systemic costs outweigh these benefits. Policymakers in Wisconsin must consider these findings carefully.
Costs Will Go Up, Quality Will Go Down
- No Coverage Gaps: Wisconsin is unique among non-expansion states because it implemented a partial expansion; providing Medicaid coverage to childless adults up to 100% of the federal poverty level (FPL) to eliminate any coverage gaps.
- Higher Private Insurance Costs: Our analysis finds that Medicaid expansion is positively correlated with higher per capita healthcare expenditure, with expansion states spending an average of $215.59 more annually, representing a 2.1% increase compared to non-expansion states.
- Less Access to Care: There is also no guarantee that Medicaid recipients will receive the care they need. 96.1% of doctors accept new private insurance patients while only 74.3% accept new Medicaid patients. Expansion would shift people from private insurance to Medicaid, which could worsen health outcomes.
- Less Focus on Most in Need: Expansion states have shifted spending away from children, the elderly, and the disabled in favor of childless adults, spending a third less on these most vulnerable populations compared to non-expansion states.
Potential Budget Impacts in the Trump Era
- With the federal government focused on reducing the federal debt, renewed attention has been focused on the Medicaid reimbursement rate.
- Federal deficit reduction efforts could reduce the federal match rate for Medicaid expansion, shifting more costs to the state. Recent reports indicate the current 90% match could drop to 60%, leaving Wisconsin responsible for an estimated $285 million in new costs.
Improper Payments Would Also Grow
- As states expanded Medicaid, improper payments grew exponentially. For example, in 2018, improper payments amounted to $35 billion and in 2020 that number grew to $90 billion. That number is likely to grow as more data becomes available.
The Bottom Line: Medicaid expansion, often touted as a solution, is just not right for Wisconsin. Especially for a state like ours that does not have significant gaps in care. We hope our report can serve as a warning to policymakers looking for actual solutions to Wisconsin’s health care problems.
Read more:
Miranda Spindt
Policy Associate
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