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The problem is cost, not coverage


Jonathan Small October 9th, 2013

One of the major provisions of the Affordable Care Act, “Obamacare,” is expansion of Medicaid to most individuals up to 138 percent of the federal poverty level.

According to Obamacare, the federal government would cover 90 percent of the cost of such an expansion long-term. States would be required to pay the difference.

When passed by Congress and signed by President Barack Obama, the Obamacare Medicaid expansion was mandatory, but in a 7-2 decision, the United States Supreme Court made the Medicaid expansion optional for states.

State cost estimates and the size of enrollment of such an expansion in Oklahoma vary widely. Realistic estimates for the cost to the state are over $222 million a year, an added more than $1,300 in state spending on average per Oklahoma tax return.

Estimates for the eligible population range from 180,000 to 235,000, allowing many able-bodied adults to receive health care virtually free and paid for by taxpayers. Many states like Arizona and California expanded Medicaid before Obamacare. As Jonathan Ingram of the Foundation for Government Accountability noted, Arizona estimated it would spend $2 billion from Medicaid expansions during 2002 to 2008 — but actual costs were $8.4 billion.

Expansion states have seen significant cost overruns and have resorted to arbitrary provider or patient care cuts, tax increases and a decrease in spending for core services to cope.

Advocates of Obamacare’s Medicaid expansion propose Oklahoma could use Obamacare funds to continue the popular Insure Oklahoma program. But because of Insure Oklahoma’s personal responsibility components, including enrollment caps, premium sharing, work requirement and exemptions from family planning service mandates, the Obama administration has seemingly rejected Insure Oklahoma once only to later allow a one-year extension.

Even the taxpayer-funded Leavitt report states that Insure Oklahoma would need to be modified according to the federal government’s wishes to get enhanced federal funding for it to continue past the one-year allowance.

It is true that there has long been a major problem with our health care system, but that problem is the cost of care — not coverage for care. Our medical pricing system is mostly not transparent to users. Hospitals set and conceal their prices using a proprietary “charge master” or “master price list,” and then negotiations between health insurers and providers are conducted in private.

Distortions in the market, including trillions in subsidizing of health care by government at all levels, are what have made health care unaffordable.

In order to truly reform our health care system, we must fix Medicaid so that it works for patients, improves health outcomes and reduces fraud, waste and abuse. Also, employers and employees, policy makers at all levels of government and medical providers must cease their fixation on who pays for care and focus intently on the cost of care.

The temporary shutdown of the federal government is proof of the unreliability of the federal government and that any form of Obamacare’s Medicaid expansion in Oklahoma will result in a multi-billion-dollar unfunded mandate and tax increase for Oklahomans.

Jonathan Small is fiscal policy director of the Oklahoma Council of Public Affairs, a free-market think tank.

Opinions expressed on the commentary page, in letters to the editor and elsewhere in this newspaper are those of the author and do not necessarily reflect the opinions of ownership or management.

 
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10.08.2013 at 09:43 Reply

The shutdown is not proof of the "unreliability of the federal government." It's proof that Mr. Small's allies in Congress have given up all responsibility to govern or abide by democratic government.

Instead they would blackmail the country to get their way, all for the sake of stopping a law that helps uninsured Americans and those with pre-existing conditions have some peace of mind that they can obtain health care without going bankrupt.

Mr. Small pushes that agenda with dishonest propaganda and imaginary numbers. He says the Medicaid expansion would cost the state $222 million. This is not a "realistic estimate" because most non-partisan estimates find that the Medicaid expansion would save Oklahoma money due to the much greater federal match.

But even assuming that estimate is right, it's not $1,300 per Oklahoma tax return. There were 1.3 million tax returns filed in Oklahoma in 2010. That's $170 per tax return, and most would pay much less. That's a small price for ensuring health care is available to hundreds of thousands of our fellow citizens (the vast majority of them working hard at low-wage jobs).

 

 
 
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