We’re Just Not That Into You Part 3: Medicaid Expansion

Among the recent Affordable Care Act (ACA) headlines of failed exchanges and skyrocketing premiums, the law’s defenders have been quick to point to the reduction in the number of uninsured Americans as proof the law is working as intended. “[The ACA] is beating its goal of reducing the uninsured rate,” is a recent Mother Jones headline that is representative of the rhetoric.

And it’s true that the number of uninsured have fallen markedly. The Census Bureau reported this fall that 8.8 million fewer Americans were uninsured in 2014, the first year of ACA implementation, than in 2013, reducing the ranks of the uninsured to 10.4 percent, or around 33 million. (There are several other estimates on the number of uninsured, but none are as reliable or authoritative as Census data.)

But before ACA proponents break out the champagne, they should consider another statistic: The number of Americans on Medicaid programs increased by 10.8 million between October 2013 when open enrollment under the ACA began and December 2014, according to Medicaid.gov. (Over 70 million Americans – about one in five – are now enrolled in Medicaid, double the number enrolled in 2000.)

Given population changes and the churn of Medicaid enrollment, it is difficult to say exactly what proportion of the reduction in the uninsured can be attributed to Medicaid. (The Heritage Foundation estimates that virtually all of it can be.) What is clear is that Medicaid makes up the vast – if not overwhelming – proportion of the reduction.

The increase in Medicaid enrollment shouldn’t be a major surprise. The ACA dramatically expanded Medicaid as one of its three pillars – the others being the employer mandate and the subsidized exchanges, whose problems I discussed in the first two parts of this series.

Nevertheless, enrollment in Medicaid has exceeded expectations. California expected 800,000 new enrollees, but ended up with 2.3 million. New Mexico exceeded estimates by 44 percent, Oregon by 73 percent, and Washington State by over 100 percent. Clearly this is the pillar carrying the lion’s share of the law’s load despite the fact that 22 states have not adopted Medicaid expansion.

And while few disagree that the country has a moral responsibility to care for our less fortunate, shunting them into Medicaid, which has a long list of problems, is not exactly charity. Doctor reimbursement rates for Medicaid have been driven so low that fewer than half of U.S. doctors are even accepting new Medicaid patients. In fact, several studies have found that Medicaid recipients have no better health outcomes than those who go without health insurance at all.

Even the staunchest defenders of Medicaid must admit that its outsized role wasn’t the goal of the ACA, which as its name infers was supposed to make health care affordable for all Americans. If the country just wanted to expand the medical safety net – as these figures suggest is virtually all the ACA has done – that could have been accomplished in a far less expensive, distortionary, and disruptive fashion.

It’s time to deregulate the ACA so that real job creators can come in and offer market-based insurance solutions that are desirable to a great swath of Americans who have been overlooked by the ACA, solutions that could even compete with Medicaid to offer more effective help to the less fortunate.

Alfredo Ortiz is CEO and President of Job Creators Network


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