Medicaid needs reform, not Obamacare expansion

May 7, 2014 

This is a response to Myra Jones' April 19 letter on Medicaid expansion.

According to The Heritage Foundation, Medicaid needs reform, not expansion. And the reason for reform is this federal-state health care program provides health care to over 60 million Americans and consumes a growing portion of state and federal budgets.

Instead of reforming Medicaid, Obamacare expands eligibility to all individuals earning less than 138 percent of the federal poverty level.

Even before Obamacare, Medicaid was already struggling to provide care to its core patients. Adding more patients further exacerbates Medicaid's underlying problems.

Committing to an expansion creates a dilemma for a state. To control Medicaid spending, a state typically falls back on predictable techniques to manage costs, such as limiting reimbursements to health care providers and limiting services, which ultimately limits access to care.

These Medicaid cost controls, however, go only so far. Today, Medicaid consumes over 23 percent of state budgets, surpassing education as the largest state budget item.

As Medicaid spending continues to rise, other important state priorities such as education, emergency services, transportation, and criminal justice are squeezed.

If a state resists balancing among spending programs, the alternative is generating more revenues with tax increases. But higher taxes reduce economic growth.

As you can see, Medicaid is already spread too thin. Adding a new and complex population to this program does not solve its challenges; it only makes them worse.

States should resist and Congress should remove this temptation. Both should begin to lay out a better and more sustainable alternative than a failing Medicaid program to care for needy health care patients.

John Molloy

Lakewood Ranch

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