Medicaid expansion helps able-bodied adults, hurts poor and disabled

By Bruce Parker | Vermont Watchdog

For years, politicians have pitched universal health care as a compassionate and enlightened system that helps the poor and needy. A report released Thursday, however, claims such rhetoric is 180 degrees out of phase with reality.

According to the Foundation for Government Accountability, a Florida-based research group dedicated to efficient health and child welfare programs, the winners of Obamacare are not the poor, disabled or needy, but “able-bodied working-age adults.”

The FGA’s report “Who is on the ObamaCare Chopping Block” analyzes the demographic profile of new Medicaid enrollees and offers some startling discoveries: 82 percent of Obamacare’s new Medicaid enrollees have no kids, 45 percent do not work, and 35 percent of have criminal records.

“One of the main selling points of Medicaid expansion is that it will help our most vulnerable friends and neighbors,” Christie Herrera, senior fellow at FGA, told Watchdog.org.

“But who does Obamacare consider to be the most vulnerable? Who are the real winners of Medicaid expansion? The answer might surprise you: It’s not the elderly, it’s not people with disabilities, and it’s not even poor kids. The big winners of Obamacare Medicaid expansion are nondisabled childless adults of working age.”

Taxpayers might be horrified at another of the report’s key findings: Not only are able-bodied childless adults the winners of Obamacare, but traditional Medicaid patients are the losers.

According to the report, the cost of expanding Medicaid requires states to cut life-saving services — services that affect traditional Medicaid patients. The funding mechanism guarantees it. Under Obamacare, the young new class of able-bodied Medicaid enrollees can expect between 90 percent and 100 percent of care to be paid for through federal funding. Traditional Medicaid patients can expect about 57 percent of care to be provided by federal dollars — meaning states are on the hook for the poor and needy.

Not only does the report predict states will impose these cuts on the poor and disabled as matching federal funds decrease over time, but it claims it’s already happening.

In Arizona, health care planners dropped coverage for patients needing heart, liver, lung, pancreas and bone marrow transplants. In Oregon, the Health Evidence Review Commission dropped coverage for advanced-stage cancer treatment. The commission also made it more difficult for diabetes patients to get routine checks on blood glucose levels.

According to the report, the same funding dilemma exists in Vermont. For the Green Mountain State to save $1 in Medicaid spending, lawmakers have to cut $2.17 in services. As the federal government continues to shrink its matching funds, the problem only gets worse.

“The federal government has cut its Medicaid matching rate to Vermont by nearly 5 percentage points during the last decade (51.01 percent in FY2015, down from 58.49 percent in FY2006),” Jonathan Ingram, the report’s author, told Vermont Watchdog.

“That adds up to more than $60 million per year in extra state dollars Vermont taxpayers have to spend on Medicaid that was previously covered by the federal government.”

Ingram also said costs in Vermont’s Medicaid program are spiraling out of control, rising to nearly $1.4 billion in 2012, up from just $700 million a decade earlier. Moreover, the state-funded portion of Medicaid grew to $575 million in 2012, up from just $250 million in 2003.

The consequences could be especially dire in Vermont, which is trying to implement a single-payer system.

“It’s all about rationing care,” said Darcie Johnston, founder of Vermonters for Health Care Freedom. “The rationing is going to come because people can’t afford the co-pays and deductibles.”

Johnston said the Green Mountain Care Board has tools in place to cut services if they become too costly — for example, if too many tonsillectomies or hip replacements are being performed.

“They’re taking electronic medical records that are supposed to be used for the doctor and patients. Now they’re being used for unelected bureaucrats to make medical decisions on who gets what care,” she said.

Johnston said hospitals in Vermont have another trick for managing costs: change the meaning of words. When patients present themselves in emergency rooms, hospitals label it as “observation” instead of “admitting,” That way the state’s health care payers won’t have to foot the bill.

“So you’re getting a lot of people who have spent the night in the hospital and think they were admitted, but were only there for observation. They’re coming out with a $5,000 bill. It’s things like that that are beginning to happen.”

Johnston also said underpayment of doctors who take Medicaid patients is another sign the money’s not there.

Dr. Paul Reiss, a family care physician from Williston, agrees rationing is happening and will continue to happen. However, he said it’s a matter of perspective.

“There’s lots of commercial policies that won’t cover lots of things. If you’re at Blue Cross, you think you’re doing well, but you’re not covered for lots of things. And Medicaid actually covers a lot of things that Blue Cross and MVP don’t cover … there’s a limited amount of money obviously,” he said.

“Right now we are rationing — we’re rationing based on employment status, we’re rationing based on the ability to pay, to some extent, so those people who have funding can pay directly for those things. We’re rationing irrationally right now. There’s no rhyme or reason to it. …So, thinking of health insurance as truly coverage for everything, well it isn’t. It never has been.”

According to Tarren Bragdon, president of FGA, the state’s need to cut services to accommodate the new cost of Medicaid expansion has a shocking unintended consequence.

“The elderly and disabled will be pushed out of the safety net forever because of Obamacare’s immoral funding formula,” he said.

Contact Bruce Parker at bparker@watchdog.org