Wyoming Rejects Medicaid Expansion

by Charles Katebi

For four years, supporters of Medicaid expansion urged our elected representatives to permanently commit Wyoming to this entitlement program. And for the fourth year in a row, Wyoming's Joint Appropriations Committee, or JAC, responded with a resounding "No."

Governor Matt Mead and Wyoming's biggest healthcare institutions claimed Medicaid expansion would cover the uninsured, improve worker productivity, and even save taxpayers money amidst our budget crisis. Could these claims be true?

Fortunately for Wyoming, thirty-one states have already expanded Medicaid and are serving as real-world laboratories to test these claims. The findings?

Medicaid expansion has been an unequivocal disaster for state budgets and our elected officials know it.

After looking at other states' budgets, Senator Drew Perkins (R-Casper) said:

"When you go back and look at states that have expanded Medicaid, ninety-one percent more went on Medicaid than [estimated]. In states that have [expanded], they've found that even with cost sharing from the federal government, [projected] costs have been exceeded."

You heard that right. Medicaid expansion has enrolled and cost states far more than promised. When Ohio Governor John Kasich signed Medicaid expansion into law in 2013, he expected only 366,000 individuals to sign-up for the program. Yet by June of 2015, 600,000 had enrolled—almost twice as many as expected, and enrollment continues to grow. Ohio's Medicaid expansion is now expected to cost the state $130 million, or 134 percent more than projected in 2017.

California also expanded their Medicaid program, MediCal, assuming 795,000 individuals would enroll in 2014. But Medicaid ultimately enrolled two-million that year. As a result, California's taxpayers will be spending an additional $110 million next year on Medicaid expansion, 42 percent more than promised. As shown in the table below, other states are also wrestling with Medicaid's exploding costs.

Source: Press, A. (2015, 07 19). Projected, actual enrollment for Medicaid expansion states. Retrieved from Washington Times: http://www.washingtontimes.com/news/2015/jul/19/projected-actual-enrollment-for-medicaid-expansion/

States are now cutting vital public services as they grapple with Medicaid's exploding costs. After Colorado enrolled three times more individuals than projected, Governor John Hickenlooper is calling on legislators to cut $20 million in funding for higher education and $213 million in infrastructure spending to pay for Medicaid's exploding costs. Are these the sort of savings Governor Mead wants for Wyoming?

Aside from Medicaid's ruinous impact on state budgets, the JAC's members also feared that Medicaid expansion would throw many people off their private insurance. Representative Tim Stubson (R-Casper) said,

"We know from what we've heard from the Department [of Health] itself that expansion will pull people out of the private market. You're looking at over 5,000 being pulled out of the private insurance market and onto Medicaid. For me that creates a real concern given the fact that we have a very fragile insurance market in this state. "

Representative Stubson is right. Under Obamacare, anyone who is eligible for Medicaid becomes ineligible for federal insurance subsidies. If Representative Stubson and his colleagues had expanded Medicaid, roughly a quarter of these individuals would lose their subsidies and either face skyrocketing premiums or be forced onto Medicaid.

Yet despite hearing overwhelming evidence showcasing Medicaid's disastrous impact on states and patients, some members of the JAC remained unapologetically committed to expanding Medicaid. Senator John Hastert (D-Sweetwater) claimed that even though Medicaid expansion costs taxpayers more than promised, it's still saving them money:

"Yes states have underestimated [Medicaid expansion's enrollment], and yes, many more people have gotten onto it. But overall, [states] see a saving in what they are spending."

Indeed, many states expanded Medicaid believing that more patients on Medicaid would lead to fewer taxpayer-funded bailouts for hospitals' uncompensated care. But states never saw the savings they were promised. A report by Moody's Investors Services found that hospitals in expansion states were no more profitable than hospitals in states that refused to expand. Despite these facts, Senator Hastert and his allies clung to Medicaid's empty promises.

Fortunately, in spite of persistent misinformation from our governor, the Hospital Association, and the Department of Health, a majority of the JAC's members realized that Medicaid expansion couldn't deliver on its promises, and stripped it from the state's budget.