Medicaid expansion’s hidden cruelty

by Charles Katebi

There's no question that Wyoming needs reforms that make healthcare more affordable, accessible, and responsive to the needs of patients. Expanding Medicaid under Obamacare is not one of them. Instead, the program crowds out private insurance, underpays doctors, and delivers terrible outcomes to patients.

For starters, Medicaid expansion would take away healthcare options poor patients already have. Nearly 6,000 low income Wyomingites who would be eligible for Medicaid expansion are already covered by private insurance through the federal Obamacare exchange. As part of Obamacare coverage, they receive ample federal subsidies that cover their premiums and out-of-pocket expenses.

But if Wyoming expands Medicaid, these individuals will lose their private insurance. Under Obamacare, individuals who are eligible for Medicaid are ineligible for subsidized private insurance. Expanding Medicaid to this population would take away their subsidies, make their insurance unaffordable, and force them off their health plans.

Indeed, the vast majority of Medicaid's potential new enrollees already have private insurance. Using data from the federal Medical Expenditure Panel Survey on nationwide figures, academic researchers at the U.S. Department of Veterans Affairs concluded:

The [Obamacare] Medicaid eligibility expansion will have relatively small effects on the number of uninsured, with about four fifths of the public expansion crowding out private coverage."

Instead of expanding healthcare access, Obamacare's Medicaid expansion would strip private healthcare options away from thousands of poor Wyomingites and place them on an overburdened government system.

But it gets worse. By driving Wyomingites who are already insured onto the Medicaid rolls, the state puts vulnerable patients at risk. According to the Wyoming Department of Health, Medicaid expansion would cost Wyoming $11 million over the next two years. But because of falling mineral revenues, that's $11 million we don't have. As the director of Wyoming's Department of Health, Tom Forslund, recently explained to the Joint Appropriations Committee; "That ship has sailed… The money that I would have moved over to pay for [Medicaid expansion] is gone."

The only way Wyoming could come up with that money is by diverting resources from existing state health programs. These programs primarily serve low-income children, the elderly, and disabled. Expanding Medicaid would strip funding from programs for truly needy patients in order to provide healthcare for able-bodied and childless adults, most of whom already have private insurance.

Expansion supporters also peddle the myth that as more low-income patients enroll in Medicaid, hospitals and doctors will enjoy better compensation.

This is false. Contrary to these claims, Medicaid chronically underpays doctors and is a major drag on hospital finances. According to the Department of Health, Medicaid only pays hospitals 84 cents for every dollar of care they render to patients. Every year, Wyoming hospitals lose $14 million because of Medicaid's underpayments. This means less money to pay doctors who treat our poorest patients, and less money for hospitals that invest in new technologies that save lives.

But hold on, it gets even worse. Medicaid is about to make it even harder for doctors to treat vulnerable patients. In response to Wyoming's dramatic fall in mineral revenue, Governor Matt Mead made sweeping cuts to Medicaid's payments to doctors and hospitals. Mead first cut reimbursements across-the-board to all providers by 3.3 percent. He further slashed reimbursements through targeted payment cuts on a variety of medical providers, including nursing homes, pharmacies, and mental health clinics. Over the next two years, Wyoming's healthcare providers will see Medicaid compensation fall by $77 million.

A report from the Centers for Disease Control finds that the less Medicaid pays, the less doctors are willing to treat the program's patients. In states where Medicaid pays the least, like New Jersey and California, as many as 60 percent of practicing physicians no longer accept Medicaid patients. Mead's cuts will similarly make it harder for Wyoming's doctors to treat patients already on Medicaid. And they certainty won't be able to take on more patients through Medicaid expansion. This is a potentially dangerous problem for a rural state like Wyoming, given the state's shortage of doctors.

We also know Medicaid patients suffer from a variety of debilitating health conditions as the program drives doctors away. After surveying cancer patients, doctors at the University of South Florida found that Medicaid patients were 31 percent more likely to have late-stage breast cancer and 81 percent more likely to have late-stage melanoma than patients without any insurance at all. Other studies also find Medicaid patients fare worse than the uninsured when it comes to colon cancer, prostate cancer, vascular disease, and many more ailments. Does it make any sense to expand a healthcare program that delivers poorer outcomes than if its enrollees had no insurance at all?

Wyoming needs new and innovative ways to make healthcare less expensive and more accessible for everyone, especially the poor. Unfortunately, Obamacare's Medicaid expansion traps patients in inferior care, discourages doctors from treating them, and diverts resources away from treating the most vulnerable. Medicaid expansion is medicine that will only make Wyoming sicker.

A version of this article appeared in WyoFile.