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Expanding Medicaid: A lose-lose proposition

June 06. 2013 12:07AM

The state Senate votes today on whether to expand Medicaid eligibility to 138 percent of the federal poverty level. Thankfully, Granite Staters do not have to look far to see the effects of expanding Medicaid eligibility. Maine did it in 2002. The results were not as advertised.

Advocates of expanding eligibility made the same arguments in Maine 11 years ago as their counterparts make today. Expansion would reduce the uninsured population, thus reducing the amounts hospitals and the state pay for uncompensated care, thus saving money. It would be a win-win. But it wasn’t.

Maine expanded eligibility for childless adults with incomes up to 100 percent of the federal poverty level. There were an estimated 14,800 such individuals in Maine in 2002, according to Maine’s Health and Human Services Commissioner. But by 2007, 25,000 childless adults had enrolled in Medicaid under the expansion. Thousands of Mainers dropped their private health insurance to enroll in Medicaid.

The expansion was supposed to cut Maine’s uninsured population by 20,000 to 40,000 people. Within a decade, the uninsured population in Maine dropped by only 3,000 people. In that time, the uninsured rate started and ended at 12 percent. Meanwhile, participation in Medicaid grew by 7 percentage points, from 16 percent to 23 percent — while private health insurance coverage dropped by 7 percentage points (5 percent in employer-based coverage and 2 percent in individual coverage).

Instead of falling, uncompensated care costs grew, as did state spending on Medicaid.

New Hampshire can expect similar results. Expanding Medicaid is not about insuring the uninsured. It is about shifting people from private insurance to government insurance. It is a lose-lose proposition. It raises taxpayer costs while failing to fix the uninsured problem. New Hampshire would be foolish to do it.

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