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Will Medicaid expansion cause more economic harm than good?

September 2, 2018

Jim Jones

Northwest Nazarene University economics professor Peter Crabb recently opined that expanding Medicaid coverage to approximately 62,000 Idahoans “is likely to do more economic harm than good.” His thesis is that people who get government health coverage are more likely to engage in risky behavior and therefore require more medical care. Where to start?

The people who will be covered by Medicaid expansion are working people who make too much to get Medicaid, but not enough to get subsidized health coverage under the Affordable Care Act. The prof worries that these people will have little incentive to stay healthy if they get “free lunch” government health care.

If you are barely making enough to feed and shelter your family, you have a strong incentive to stay healthy so as not to lose your paycheck.

If the prof is correct, there are already hundreds of thousands of Idahoans doing things that are hazardous to their health because they receive government help. About 240,000 of us are getting Medicare, almost 300,000 are on Medicaid and Children’s Health Insurance, and about 125,000 are getting insurance through government jobs. Medicaid expansion would add only about 62,000 people to the list of Idahoans getting government help for medical care, which would probably not greatly increase the risky behavior factor.

Many more Idahoans get insurance through their jobs, and their employers can justifiably deduct it from their taxes. Veterans and retired military deservedly get government health coverage. And let’s not forget the many thousands who get subsidized insurance through the ACA. Why should the government subsidize almost everyone else’s health care and not the people in the coverage gap?

As for cost, Milliman, a highly regarded actuarial firm often used by the state, recently reported that Medicaid expansion could actually save the state up to $15 million per year by eliminating the need for the state’s Catastrophic Health Care Fund and the county indigency programs. The indigency programs are a real drain on the counties because they pay for often routine medical care at emergency room rates.

Perhaps the best way to find out what expansion might do is to see how it has worked in the 33 states that have expanded Medicaid to get the many millions of federal dollars available. When Ohio expanded its program, an additional 700,000 people got Medicaid coverage. Governor Kasich reports that 290,000 of those have since left the program. Most of them told the state that having the insurance helped them find or keep their job. And, one would suppose those people are contributing to Ohio’s economic well-being.

As far as the economic impact of Medicaid expansion, the infusion of federal money will create many additional health care jobs for Idahoans, help keep rural hospitals financially solvent, and keep that money circulating and multiplying through our communities. It will allow people with routine illnesses to get medical care before their conditions turn into expensive medical emergencies that taxpayers will pay for either directly or indirectly.

And, in the final analysis, isn’t it the morally correct thing to do? Why should people who are working hard to take care of their families have to choose between bankruptcy or death when they are confronted with a serious illness? Especially when almost everyone else in the state gets at least some “free lunch” medical help from the government already?

Let’s approve the Medicaid expansion initiative on the November ballot. It is the right thing to do, economically, morally, and equitably.

Jim Jones served as an Army artillery officer in Vietnam from 1968 to 1969 and received an Army Commendation Medal for his work with an orphanage there. He served for eight years as Idaho Attorney General and was a justice on the Idaho Supreme Court for 12 years. He currently resides in Boise.

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