Idaho Medicaid Expansion Questioned

Idaho Medicaid Expansion Questioned
November 7, 2012

Marc Kilmer

Marc Kilmer (mkilmer@mdpolicy.org) is a Maryland Public Policy Institute senior fellow... (read full bio)

Like their counterparts in other states across the country, Idaho policymakers are considering whether to expand Medicaid in line with the demands of President Obama’s health care law. Two recent reports sound caution about such a step, giving ample reason for the state to delay the expansion or reject it entirely.

Leavitt Partners, a consulting group headed by former Health and Human Services Secretary Mike Leavitt, released a report in September commissioned by the Idaho Department of Health and Welfare that urged the state to delay any Medicaid expansion under Obama’s law.

According to the report’s executive summary, “If Idaho decides to expand, Leavitt Partners recommends expanding in 2014, which will give the State three years of full federal funding to evaluate overall costs and utilization patterns of the newly eligible. Based on this evaluation, Idaho can make appropriate changes to the program or opt out of the expansion entirely after 2016.”

Also in September, the Idaho Freedom Foundation released a report entitled “Increased Dependency is not Compassion: Expanding Medicaid is the Wrong Solution to a Misdiagnosed Problem.” In this report, author Parrish Miller notes the state would suffer spending hikes under any Medicaid expansion.

Costs for State Will Rise

The Leavitt report found that up to 123,800 Idahoans could be newly eligible for Medicaid by 2014 if the expansion under Obama’s law were implemented. However, the report does not provide an estimate of how much this newly eligible population will cost the state.

“Overall [the Leavitt report] seems to support my analysis,” said Miller, “but their estimation that only 85 percent of newly eligible Medicaid recipients will enroll could easily be low due to the impact of the individual mandate. Examples from the past cannot account for this unprecedented federal demand.”

For Miller, the cost concern is paramount.

“The key issue is that even if expanding Medicaid only costs the state $100 [million] to $130 million in the first six years—excluding administration costs—because the state will pay only about 5 or 6 percent of the cost during those years, the total cost will likely be more than $2 billion,” he said. “It is that amount that should be at the forefront of this conversation. In addition, there is no guarantee that the federal government will continue to pay 90 percent after 2020. They could easily drop coverage to 70 percent or potentially even lower.”

Undermining Obamacare

Besides noting the fiscal hit the state would take, Miller suggests another reason not to expand Medicaid.

“Refusing to expand Medicaid undermines the central goal of Obamacare—if health care is not universal, and millions are denied the option to become dependent on medical subsidies, the central planners lose,” writes Miller in his report. “Refusing to expand Medicaid is the best way to deny the statists the victory they have so long sought in the establishment of ‘universal health care.’”

Instead of expanding Medicaid, Miller counsels state policymakers to pursue other reforms. “The stated goal of expanding Medicaid is to help the poor and disabled, but the best way to accomplish that goal is to lower the costs of health care overall and to help these people get off of the government dole,” he said.

Idaho May Pause

In a state like Idaho, where opposition to Obama’s law is strong, this line of argument may prove persuasive.

“Obviously the [Leavitt] report never addresses the question of whether Medicaid is even within the scope of the proper role of government to begin with,” said Miller.

It is unclear what Idaho will do regarding Medicaid expansion. Republican Gov. Butch Otter has expressed reservations in the past about expanding Medicaid, noting in July that some estimates say the cost will be “as much as we are appropriating from general tax receipts in the coming budget year for all our colleges, universities, and community colleges combined.” However, he has declined to commit to a course of action until further study is completed.

Internet Info:

Parish Miller, “Increased Dependency is not Compassion: Expanding Medicaid is the Wrong Solution to a Misdiagnosed Problem,” Idaho Freedom Foundation: http://heartland.org/policy-documents/increasing-dependency-not-compassion-expanding-medicaid-wrong-solution-misdiagnosed

Leavitt Partners, “Idaho’s Newly Eligible Medicaid Population”: http://healthandwelfare.idaho.gov/Portals/0/Medical/MedicaidCHIP/0918%20Idaho%20Leavitt%20Report%20Executive%20Summary.pdf

Marc Kilmer

Marc Kilmer (mkilmer@mdpolicy.org) is a Maryland Public Policy Institute senior fellow... (read full bio)