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Biden should ditch effort to expand Medicaid

On June 17, the U.S. Supreme Court made clear that the judiciary would not overturn the Affordable Care Act (ACA; aka Obamacare). That task would fall to Congress while the executive branch has some room to tinker with things like eligibility rules and implementation of mandates. Unfortunately, it is now the Biden administration, not Congress, taking the lead in shaping health care policy and law. Biden is on a mission to quietly expand Medicaid despite little evidence that the government program actually improves outcomes for the low-income beneficiaries it is intended to help. Rather than unilaterally expand a failing program, the Biden administration should work with lawmakers to empower consumers to buy the private plans of their choosing. More entitlement spending and federal rules will only mean worse outcomes for millions of patients and taxpayers.

Recently, NPR reported that President Biden is quietly championing a series of expansions to the Medicaid program which “could further boost … enrollment … including coverage for new mothers. Others who could also gain coverage under Biden are inmates and undocumented immigrants. At the same time, the administration is opening the door to new Medicaid-funded services such as food and housing that the government insurance plan hasn’t traditionally offered.” It is hardly new or exceptional for the federal government to offer a helping hand to individuals who are struggling to get by. What is alarming is the administration’s insistence on gambling billions of taxpayer dollars in a program with such a poor track record.

To find out whether Medicaid actually helps its low-income beneficiaries, researchers across the country have marshaled mountains of data to test the impact of program expansions on a host of health outcomes. In 2017, researchers supported by the Robert Wood Johnson Foundation (which supports Medicaid expansion) studied “how a rapid expansion of public health insurance for pregnant women and infants under the Medicaid program affected the adult outcomes of individuals born between 1979 and 1993 who gained access to coverage in utero and during the first year of life.”

The team found that the expansion cost about $500 million in additional taxpayer dollars per year but has only saved about $130 million per year in avoided hospitalization expenses for the now-adults who were covered as infants. In other words, the government could have spent half the money, put the funds in a health savings account for each beneficiary, and taxpayers and enrollees would’ve been far better off.

And these sorts of findings aren’t limited to just one study. A June 2018 study in Health Affairs summed up the results of 77 studies on Medicaid’s effectiveness and found that around three-quarters of all studies found either no effect or a negative effect on outcomes deemed “consistent with the goals of the Affordable Care Act.” Study questions that focus on whether or not more people have insurance on paper as the result of Medicaid expansion (duh) tend to obscure findings on the actual health of enrollees. Alarmingly, 60 percent of analyses found that health status and quality of care did not improve due to increased Medicaid funding.

Instead of increasing Medicaid spending by about $6,000 per adult per year, policymakers should park some of these expansion dollars into tax-free health savings accounts for struggling Americans. These beneficiaries could then choose whether to spend the money on a private, traditional insurance plan, a short-duration plan, a concierge service, or some sort of combination. Unlike the plans offered under Obamacare, individuals would be able to forgo “essential” services like smoking cessation and pregnancy coverage.

The idea behind health care reform should be simple. Individuals should be empowered to shop around for the services they want and need with maximum flexibility and few strings attached by federal bureaucrats. Until this becomes a reality, expect high costs for taxpayers and consumers and subpar quality.

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