New LSU “Jobs” Study Raises More Questions Than It Answers

The release by the Louisiana Department of Health late Friday afternoon of an updated study showing the jobs benefit of Medicaid expansion concedes an important point pointed out by the Pelican Institute over 16 months ago. This year’s study admits that the 2018 paper over-counted the federal dollars and jobs associated with Medicaid expansion, because it failed to subtract for the many people who forfeited federal subsidies when they transitioned from Exchange coverage to Medicaid after expansion.

However, the researchers have yet to offer an explanation—or a retraction—of their inflated claims in last year’s paper. Nor have the Department of Health and LSU begun to answer the many questions about the circumstances surrounding these flawed studies.

While correcting one error, this year’s study also contains other questionable claims and assumptions:

  • The 2019 study discusses substitution effects, whereby federal Medicaid dollars merely replace other forms of health care spending. However, unlike a Montana study in which the researchers cite in their work, the Louisiana paper apparently does not quantify instances where federal dollars substituted for dollars previously spent by individuals or employers—thereby inflating the supposed impact of Medicaid expansion. That apparent omission also means the researchers did not quantify the number of people who dropped private coverage to join Medicaid expansion—which internal Department of Health records suggest is larger than the Department has publicly admitted.
  • The 2019 study claims that the federal dollars attributable to Medicaid expansion declined by only 4.4% from Fiscal Year 2017 ($1.85 billion) to Fiscal Year 2018 ($1,768 billion). Yet, the number of jobs attributed to these federal dollars decreased by 25.5%, from 19,195 in 2017 to 14,263 in 2018. This drop in the jobs impact suggests significant changes to the economic modeling used in the 2018 study when compared to this year’s paper. Yet, the researchers provide no explanation for this decline, or any changes in their methodology.
  • While not explaining the decline in the jobs outcomes compared to last year’s paper, the 2019 study also does not explain many other figures cited in the paper. For instance, the paper discusses—but does not include a specific dollar figure for—the federal dollars forfeited by individuals who switched from Exchange coverage to Medicaid expansion. Particularly given the errors in last year’s paper, the researchers had an obligation to “show their work,” and provide clear and transparent calculations explaining their conclusions. They did not do so.

The researchers also fail to note that, their study’s claims to the contrary, Louisiana has barely created any jobs since Medicaid expansion took effect. According to the Bureau of Labor Statistics, in June 2016, the month before expansion took effect, Louisiana had 1,979,100 jobs. According to the most recent federal data, Louisiana’s non-farm payrolls now stand at 1,981,000 jobs—a meager gain of 1,900 jobs in over three years. With Louisiana having over 10,000 more jobs one year before expansion took effect than it does today, the real-life data show that greater dependence on the federal government has not provided the economic boom that the study’s authors claim.

Rather than relying on an expansion of the welfare state to generate jobs—an agenda that has not worked, as the past three years have demonstrated—Louisiana should instead reform its Medicaid program as part of a broader agenda to create jobs and opportunity for the state. The people of Louisiana deserve real change in their lives, not flawed, taxpayer-funded studies attempting to defend the failed status quo.

This post was originally published by the Pelican Institute.

Two Factors Behind the Medicaid Enrollment Explosion

While enrollment in Obamacare’s exchanges has fallen below original projections, largely due to unaffordable premiums for health insurance coverage, enrollment in its Medicaid expansion has exploded. By the end of 2016, enrollment in 24 states that expanded Medicaid enrollment to able-bodied adults exceeded the states’ original projections by an average of 110 percent.

New studies and data suggest two related reasons why: Ineligible individuals getting on (or staying on) the Medicaid rolls, and people dropping private coverage to enroll in Medicaid expansion.

Ineligible Enrollees

The study caused a political firestorm in Louisiana. Eventually, the state dropped approximately 30,000 individuals from the Medicaid expansion rolls. Ironically enough, the Medicaid program came in approximately $400 million under budget in the fiscal year ended June 30—due in large part to the enrollment purge. To put it another way, Louisiana taxpayers had spent $400 million in the prior fiscal year on ineligible Medicaid enrollees.

A study released this month provides new evidence that the phenomenon of ineligible enrollees may go far beyond Louisiana. The study examined Census data in states that expanded Medicaid when Obamacare’s expansion took effect in 2014 and compared it to states that have not expanded. Upon analyzing the data by income, the authors found that

There is strong evidence that Medicaid participation increased for groups for whom Medicaid was not intended to be the source of insurance coverage. Neither excluding those who might be categorically eligible [e.g., individuals with disabilities already eligible for Medicaid], nor focusing on those whose income was far from the threshold alters the fundamental results. The estimated program effect grows over time.

For instance, the authors found that for individuals making more than 250 percent of the federal poverty level—nearly double the eligibility threshold for Medicaid expansion—fully 65 percent of the gains in insurance coverage after Obamacare took effect came not from people enrolling in employer coverage or other insurance (e.g., exchange plans), but from increased Medicaid enrollment.

However, the scope of this phenomenon and the fact that it occurred comparatively high up the income scale suggests widespread problems with rooting out ineligible Medicaid enrollees. People could fail to report income increases to state authorities, improperly estimate their income when applying for coverage, or—as the authors suggest—friendly social workers could decide to cast potential enrollees’ circumstances in the best possible light when filling out application forms on their behalf.

Government Programs ‘Crowding Out’ Private Coverage

In other cases, Medicaid expansion appears to have accelerated the phenomenon of “crowd out,” whereby people drop their private coverage to enroll in government-funded benefits. Crowd out enrollees are not necessarily ineligible for benefits—that is, they meet income limits and other criteria for Medicaid—but every dollar spent on covering people who already had health insurance prior to expansion arguably represents a sub-optimal use of scarce taxpayer dollars.

As part of my work with the Pelican Institute, I recently reported that the Louisiana Department of Health compiled internal data showing that, once Medicaid expansion went into effect in the state in July 2016, several thousand individuals each month dropped their private coverage to go on Medicaid. The Department of Health, claiming the data inaccurate, stopped compiling it altogether late in 2017—even though their stated explanation for the inaccuracy meant their data arguably under-stated the number of individuals dropping coverage.

The data raise the obvious question of why states would want to follow Louisiana’s lead and spend hundreds of millions of dollars (at minimum) subsidizing individuals who previously had private insurance.

Will Congress Act?

The twin developments suggest a major role for Congress, to say nothing of the states, in combating these sizable expenditures on Medicaid waste, fraud, and abuse. More rigorous eligibility checks would help, for starters, as would the widespread adoption of a new Medicaid waiver program approved in Utah.

Beginning in January, the Utah waiver will require individuals with an offer of employer coverage to remain enrolled in that employer plan, with Medicaid reimbursing premiums—a change designed to avoid the crowd-out seen in Louisiana.

This post was originally published at The Federalist.

LSU, Department of Health Inflate Claims in Medicaid Expansion Studies

In the coming days, the Louisiana Department of Health (LDH) will release a study conducted by LSU researchers claiming that Medicaid expansion created tens of thousands of jobs in Louisiana. The study’s underlying premise, that higher taxes and government spending will create economic growth, has rightfully raised questions among free market and conservative circles in the state. But before they release this year’s study, both the Department and LSU face an even more fundamental problem: Last year’s version of this report made inflated claims.

Last month, a similar study covering the potential impacts of Medicaid expansion in North Carolina highlighted the problems with the LSU report. In calculating the federal dollars attributable to Medicaid expansion, the North Carolina researchers “subtract[ed] the federal tax credits that otherwise would have been paid for individuals with incomes between 100% and 138% of poverty for” coverage on the health insurance Exchange.

After months of public records requests by the Pelican Institute, the LSU researchers acknowledged that—unlike their counterparts on the North Carolina study—they did not subtract these foregone Exchange subsidies when calculating the “net new federal dollars” attributable to Medicaid expansion. The university stated that while the researchers “indicated the desire to analyze other data” regarding Exchange subsidies, they ultimately “did not do so.”

Because the researchers did not subtract the federal Exchange subsidies forfeited by new Medicaid recipients, they inflated the “net new federal dollars” attributable to expansion. Additionally, the study inflated the jobs supposedly associated with Medicaid expansion by a sizable amount.

According to the federal Centers for Medicare and Medicaid Services (CMS), subsidized enrollment on Louisiana’s Exchange fell by nearly half, from 170,806 in March 2016 to 93,865 in March 2018. Fully, 96.5 percent of that decline came from the narrow sliver of the population that now qualifies for expansion, because these individuals moved from the Exchange to Medicaid. Multiplying these tens of thousands of individuals by the average Exchange subsidy provided to them means last year’s study overstated the “net new federal dollars” attributable to expansion by hundreds of millions of dollars, and thousands of jobs.

Taken at face value, LSU’s response means the researchers inflated the study’s claims—they intended to examine the CMS data but did not do so, ignoring a data source that would reduce their study’s results. Even a more benign interpretation, in which the researchers did not know about the CMS data when they originally drafted their report, does not explain the professors’ continued silence on this matter.

On three separate occasions, the Pelican Institute specifically asked the researchers to retract the flawed study. On each occasion, the researchers failed to acknowledge the request.

The Pelican Institute also pointed out the flaws in last year’s study to LDH. According to the public records requests, the lead LSU researcher sent Secretary Rebekah Gee and Medicaid Director Jen Steele a copy of the Pelican Institute’s rebuttal—which prominently noted its inaccuracy—on April 25, 2018.

As individuals responsible for a $12 billion Medicaid program, both Secretary Gee and Ms. Steele undoubtedly know that federal law made individuals who qualified for Medicaid expansion ineligible for Exchange subsidies once expansion took effect. Therefore, they should also know that, by failing to subtract the foregone Exchange subsidies in its calculations, the study inflated the impact of Medicaid expansion. Despite these facts, LDH is spending even more taxpayer dollars to produce a predictably flawed follow-up report.

With so much conflicting information circulating around Medicaid expansion, the people of Louisiana deserve the truth, not more inflated claims from flawed studies. Coming on the heels of stories about Medicaid recipients with six-figure incomes and tens of thousands of individuals dropping private insurance to enroll in expansion, this study is the latest instance of LDH failing to disclose important facts to the public. Lawmakers should increase their oversight of the Medicaid program, and taking a close look at this study is a good place to start.

This post was originally published at Houma Today.

Medicaid Expansion Has Louisianans Dropping Their Private Plans

If any state can serve as the poster child for the problems associated with ObamaCare’s Medicaid expansion, it’s Louisiana, which joined the expansion in 2016, after Democrat John Bel Edwards became governor. An audit released last year exposed ineligible Medicaid beneficiaries, including at least 1,672 people who made more than $100,000. But Louisiana’s Medicaid expansion has revealed another waste of taxpayer funds, both in the Pelican State and nationwide: the money spent providing coverage to people who already had health insurance.

Via a public-records request, the Pelican Institute obtained data demonstrating that thousands of Louisiana residents dropped their private coverage to enroll in Medicaid under the expansion. A spreadsheet compiled by the Louisiana Department of Health put the count between 3,000 and 5,000 people a month, and that doesn’t count those who enrolled in Medicaid first, then dropped private coverage.

When asked about the spreadsheet, Medicaid officials stated in an email that the Health Department “stopped producing” the data in late 2017 when it discovered its vendor’s information “was limited to [third-party liability] during the period of Medicaid enrollment.” Because the vendor couldn’t track beneficiaries before or after their Medicaid enrollment, the spreadsheet arguably underestimated the number of people dropping private coverage to enroll in Medicaid.

The Health Department’s internal spreadsheet information comports with other coverage estimates. A survey by Louisiana State University researchers found that, from 2015-17, enrollment in private insurance fell precipitously among low-income Louisiana residents eligible for Medicaid under the expansion. The number of people covered by private health insurance declined by tens of thousands, even as Medicaid enrollment skyrocketed by more than 141,000.

That masses of Louisiana residents canceled their private coverage to enroll in “free” Medicaid should surprise no one. In 2007 Massachusetts Institute of Technology economist Jonathan Gruber, who later became an architect of ObamaCare, concluded that some coverage expansions would see rates of “crowd-out”—government programs squeezing out private insurance—approaching 60%. Eight years later, Louisiana’s Legislative Fiscal Office estimated that crowd-out would cost taxpayers between $900 million and $1.3 billion over five years. Because enrollment in Medicaid expansion vastly exceeded initial projections, the true cost may rise far higher.

Federal budget analysts have yet to quantify the effect of crowd-out on Medicaid expansion—but they should, because estimates suggest that Washington is spending billions annually funding Medicaid for people with prior health coverage. Montana officials recently released a study boasting of 8,700 workers who would have employer-sponsored coverage but for Medicaid expansion, claiming that expansion provided “cost savings to businesses” of up to $114 million. Only in a bureaucrat’s mind would more government spending, taxes and government dependency represent “cost savings.”

In response to the Louisiana audit, the state recently purged more than 30,000 ineligible people from the rolls. Health Secretary Rebekah Gee claimed the action demonstrated how she and Gov. Edwards “want to make sure that only those that need Medicaid have Medicaid.” But good stewards of taxpayer dollars, upon receiving preliminary reports of people dropping coverage to enroll in Medicaid, would have demanded better data and fashioned policy solutions to address the problem. The Louisiana Department of Health did neither and stopped compiling the data.

Generations of Louisiana politicians, since Gov. Huey Long in the 1930s, have claimed that fostering an economy rooted in government dependence will lead to prosperity. But the more than 67,000 residents who have left the state in the past three years alone see a stagnant economy and a slowly sinking state. Louisiana can do better, and other states thinking about Medicaid expansion should think again.

This post was originally published at The Wall Street Journal.

What You Need to Know About Medicaid Crowd Out

A PDF version of this document is available on the Pelican Institute’s website

In recent weeks, lawmakers have focused on the tens of thousands of ineligible individuals who improperly received benefits under Louisiana’s Medicaid expansion. But fighting waste, fraud, and abuse in Medicaid should also include reforms to address another important issue—crowd out. The term refers to Louisiana residents who have dropped their existing coverage to enroll in Medicaid expansion—in other words, government programs “crowding out” private insurance. Here’s what you need to know about crowd out and Medicaid expansion:

Tens of Thousands of People Have Dropped Private Coverage to Enroll in Medicaid

Recently, the Pelican Institute filed a public records request to obtain internal Louisiana Department of Health (LDH) data showing that for much of 2016 and 2017, several thousand individuals dropped their existing health coverage to enroll in Medicaid expansion. With enrollment in Medicaid expansion averaging approximately 15,000 individuals per month in 2017, the data indicates a significant percentage of enrollees dropped their prior coverage to join Medicaid expansion.

Funding Benefits for People Who Previously Had Health Insurance Consumes Scarce Medicaid Resources

Crowd out populations pose big potential costs for Louisiana taxpayers. In 2015, the Legislative Fiscal Office assumed that if Louisiana expanded Medicaid, the state would spend between $900 million and $1.3 billion over five years providing Medicaid coverage to individuals with prior health coverage.

When testifying before the House Appropriations Committee on April 23, LDH staff indicated that, during the fiscal year ending this June 30, the average expansion enrollee cost Medicaid $523.85 per month, or $6,286.20 per year. Multiplying this average cost per enrollee by the number of individuals who dropped private coverage, according to last year’s LSU Health Insurance Survey, yields a potential cost to state and federal taxpayers of $461.6 million this fiscal year:

  • Dropped coverage from a current employer: 40,147; Potential cost to taxpayers: $252.4 million
  • Dropped coverage from a former employer: 23,086; Potential cost to taxpayers: $145.1 million
  • Dropped privately purchased coverage: 10,201; Potential cost to taxpayers: $64.1 million

Because the LSU researchers extrapolated the coverage numbers from survey responses, and because the survey responses varied only slightly from 2015 to 2017, the results for privately purchased coverage, and coverage from a former employer, might have occurred due to random chance, rather than any actual drop in coverage rates. Regardless, the decline in coverage from a former employer DID meet the tests of statistical significance; this crowd out is costing the Medicaid program on the order of $145.1 million per year. Moreover, the potential fiscal impact of the crowd out problem demonstrates the need for more accurate data on the issue.

Crowd Out Metrics

The March 2019 LSU report cites a seminal 1996 work from MIT Professor Jonathan Gruber to define crowd out—the decrease in private insurance divided by the change in public insurance. To put it simply, crowd out should quantify the percentage of Medicaid enrollees who dropped their private coverage to enroll in expansion. Unfortunately, LDH has used different—and inaccurate—metrics to define crowd out on several occasions in attempts to minimize its impact.

For instance, in August 2017, the Department counted 5,659 “Medicaid expansion members who have private insurance whose private insurance policies ended 0-60 days prior to Medicaid expansion enrollment”—4,957 whose coverage ended 0-30 days prior to enrollment in expansion, and another 702 whose coverage ended 31-60 days prior to enrollment. The Department’s internal spreadsheets calculated one crowd out rate of 1.3%, based on a total enrollment in expansion of 442,674.

But this calculation creates an inherently inaccurate result, because it divides the number of new enrollees who dropped coverage by the number of total enrollees in the program. An accurate crowd out rate would compare like with like—dividing the number of new enrollees who dropped private coverage in a given month by the overall number of new enrollees in that month. This metric would accurately determine what percentage of new enrollees are dropping coverage.

Using that rubric, Louisiana’s Medicaid expansion suffers from far higher crowd out rates. According to data provided by LDH in response to the Pelican Institute’s public records request, in August 2017 a total of 13,955 individuals enrolled in expansion—8,783 who had previously enrolled in Medicaid, and 5,172 who had never done so before. Dividing the number of new enrollees who dropped private coverage in the prior 30 days (4,957) by the number of new enrollees overall (13,955) yields a potential crowd out rate of 35.5%—far higher than the 1-2% figure cited in the internal LDH spreadsheets.

At the April 23 House Appropriations Committee hearing, Medicaid director Jen Steele cited data from the LSU Health Insurance Survey to estimate a crowd out rate of 2.4%. But that survey data expressed coverage changes as a percentage of the overall low-income population, not based as a percentage of Medicaid enrollees—making it another inaccurate metric.

Based on LDH’s own internal data, that rate more likely approaches 30-40%.

Need for Better Program Integrity

The debate regarding crowd out comes on the heels of the Medicaid eligibility situation, in which LDH acknowledged that 1,672 individuals with six-figure incomes—including at least one individual reporting a higher income than Gov. John Bel Edwards’ annual salary—enrolled in Medicaid expansion. LDH’s failure to address the crowd out problem, and at the same time, the expansion enrollment of individuals with six-figure incomes suggests the need for fundamental reform to Louisiana’s Medicaid program. Government officials at all levels must serve as smart stewards of scarce taxpayer dollars, and a growing number of signs raise questions about LDH’s fulfillment of this critical role.

Conclusion

Solutions to mitigate crowd out should focus on using scarce government resources wisely, while promoting independence and self-sufficiency amongst beneficiaries. For instance, Indiana recently proposed a waiver that would allow beneficiaries transitioning off of Medicaid to keep a portion of their Medicaid dollars. Those retained dollars could fund co-payments on their new private insurance, whether purchased through an employer or individually. These and similar innovative concepts would encourage beneficiaries to transition off of government assistance and into private coverage.

High Risk Designation Reinforces Problems in Louisiana’s Medicaid Expansion

That the federal Centers for Medicare and Medicaid Services (CMS) recently designated Louisiana’s Medicaid expansion to the able-bodied as “high risk,” following the release of a “deeply troubling” report by the state’s Legislative Auditor late last year, should surprise no one. As the Pelican Institute first reported last year, enrollment in Medicaid expansion has exploded, with state officials only now scrambling to detect waste and fraud in the program.

At the time of Medicaid expansion, officials first stated that enrollment could reach 306,000, only to up its projections later. By the time Pelican released its report last January, enrollment had exceeded 466,000—well above the state’s highest estimates. As of this March, enrollment now stands at 502,647, nearly a 10% increase compared to January 2018.

With enrollment nearly two-thirds higher than original projections, it should not have come as a shock to the state that ineligible individuals had enrolled in Medicaid expansion. As enrollment in expansion grew and grew, seemingly without limit, the state’s Department of Health should have spent more time scrutinizing enrollees, to make sure only eligible individuals receive program benefits.

Yet the auditor’s report last November found that out of 100 randomly selected applicants, fully 93 of them did not qualify for Medicaid benefits at some point during their coverage. Nearly two-thirds (66.3%) of the dollars given to insurers on these individuals’ behalf was improperly paid. Based on this sample, the auditor estimated that the Medicaid program spent up to $85.5 million providing benefits to ineligible individuals.

The applicants selected by the legislative auditor reported incomes to the state well beyond the threshold where they would qualify for Medicaid expansion. One Medicaid enrollee reported an income of $145,146—this for a one-person household. By comparison, Louisiana’s governor, John Bel Edwards, earns only $130,000 per year. So why did an individual making more than the state’s governor spend a full 12 months on a program for “low-income” individuals?

The Department of Health now claims that it has updated its enrollment systems to allow for more frequent eligibility checks, in the hopes of reducing the types of abuses uncovered by the legislative auditor. But if the Department of Health really wants to serve as a good steward of taxpayer dollars, it should go much farther, and propose solutions to the problem of Medicaid expansion crowding out private coverage.

In 2015, the Legislative Fiscal Office estimated that approximately 30-40% of Medicaid expansion enrollees would drop their private coverage to enroll in Medicaid. In other words, taxpayers would spend between $900 million and $1.3 billion over a five-year period providing insurance to individuals who already had coverage prior to expansion.

The dramatic increase in program enrollment, well beyond original projections, indicates that Medicaid expansion is indeed crowding out private coverage. An LSU survey released last year provided further confirmation, suggesting that approximately 75,000 individuals dropped employer-based or private coverage to enroll in Medicaid during the expansion’s first year alone. Yet the Department of Health has failed to acknowledge this problem, let alone propose solutions to fix it.

As the Pelican Institute report last year noted, Medicaid expansion has led to an explosion of government spending, taking the program away from the vulnerable populations for whom it was originally designed. Policy-makers should develop a way to phase out the expansion over time, while applying for a state-based waiver to reform—and transform—the Medicaid program.

This post was originally published at the Pelican Institute.

Debunking the Government’s Pro-Medicaid Report

Louisiana’s Medicaid expansion helped far too few people obtain good, affordable health coverage and actually cost Louisiana desperately needed jobs. But a taxpayer-funded report released by the Louisiana Department of Health on April 10 claims that the state’s Medicaid expansion – by opening the program to able-bodied adults – will generate billions of dollars in economic activity and thousands of jobs. The report’s flawed perspective cannot mask the state’s poor track record at growing the economy and jobs the past few years – an environment which current proposals for tax increases would only further undermine.

I. The Louisiana Department of Health’s report is factually inaccurate. The Louisiana Department of Health’s pro-Medicaid report discusses “net federal money” gained from the state’s Medicaid expansion, but in reality, it only looks at Medicaid-specific dollars. This perspective ignores the fact that people were dropping Obamacare Exchange coverage to enroll in the Medicaid expansion – and losing federal subsidy dollars in the process.

Over the past two years, subsidized enrollment on Louisiana’s health insurance Exchange has fallen nearly in half—from 170,806 in March 2016 to 93,865 earlier this year. The dramatic drop in enrollment illustrates that many individuals qualified for federal Exchange subsidies prior to expansion taking effect, and then switched to Medicaid.

The report’s discussion of “net new federal dollars” inaccurately ignores the substantial funding in federal Exchange subsidies that at least some expansion enrollees gave up by enrolling in Medicaid. In 2012, CBO noted that, for similarly situated low-income individuals, Exchange subsidies would average about $9,000 per year, but Medicaid coverage would cost $6,000. For those individuals who would have qualified for discounted Exchange policies, their Medicaid coverage may have actually cost Louisiana additional federal dollars – and jobs – because Medicaid could cost less than federal insurance subsidies.

Moreover, the Legislative Fiscal Office in 2015 assumed that approximately 20 percent of the enrollees in expansion would give up other private coverage to enroll in Medicaid. If Medicaid enrollees dropped employer-sponsored coverage to enroll in expansion, the supposedly “new” federal subsidy dollars would instead supplant existing coverage subsidies provided by the employer. The report does not acknowledge this trade-off.

II. Money doesn’t grow on trees – and tax hikes caused by Medicaid expansion actually cost Louisiana jobs. The report only examines federal spending on Medicaid, and not the tax increases used to finance that federal spending. Those tax increases cause job losses, but the report makes no attempt to count them. However, as others have noted, Christina Romer, one of former President Barack Obama’s chief economic advisers, believes that, on an economic impact basis, tax increases used to fund federal spending far outweigh that federal spending.

III. Medicaid creates a disincentive for work. The Congressional Budget Office concluded that Obamacare would, as a whole, reduce the workforce by the equivalent of 2.5 million jobs; Medicaid expansion provides some of the reason for that net job reduction. CBO analysts note that, because an extra dollar of income would cause individuals to lose Medicaid eligibility – subjecting them to sizable premiums and deductibles for Exchange coverage – expansion “effectively creates a tax on additional earnings” that “reduces the incentive to work.”

IV. Health care is not a jobs program. Those words come from none other than Zeke Emanuel, a former White House adviser who helped craft Obamacare. In a 2013 article in The New York Times, Emanuel noted that “the more we can control health care costs, the more Americans will prosper.” Other researchers from Harvard University have made the same point: “It is tempting to think that rising health care employment is a boon, but if the same outcomes can be achieved with lower employment and fewer resources, that leaves extra money to devote to other important public and private priorities.”

Taking the Governor’s report to its logical conclusion, to maximize the generous federal match rate for Medicaid expansion, Louisiana should, for instance, start paying doctors $5,000 for a simple office visit. That added Medicaid spending would create even more jobs and economic growth—as would a government program paying individuals to dig ditches and fill them in again. But, as the Harvard researchers note, neither approach would represent the most efficient use of taxpayer resources. And the report makes little attempt to argue that Medicaid expansion represents the best and most efficient source of economic activity.

V. Asking Washington for more funding isn’t a solution. The report argues for more reliance on federal dollars to support Louisiana, even though, according to the Pew Charitable Trusts, the state budget remains the most dependent on spending from Washington. As of 2015 – even before Medicaid expansion took effect in Louisiana – fully 42.2 percent of the state budget came from Washington. With the federal government facing a $21 trillion (and rising) debt, making Louisiana even more dependent on Washington’s largesse represents a recipe for fiscal ruin.

VI. If Medicaid is a job creator, why is Louisiana still down jobs year over year? If Medicaid expansion has created so many jobs, why has Louisiana lost a net of 200 jobs in the past year? According to the most recent Bureau of Labor Statistics data, the Louisiana workforce shrank from February 2017 to February 2018. With a shrinking workforce, the second-lowest economic growth rate in the country, and the largest decrease in incomes nationwide in 2016, if Louisiana receives any more “prosperity” from Medicaid expansion, the current malaise in the state could turn into a full-fledged economic crisis.

Conclusion

At a time when Louisiana faces its own “fiscal cliff,” the Department of Health should have better things to do with taxpayers’ hard-earned dollars than commission what amounts to a misleading propaganda campaign claiming that more government can grow Louisiana’s economy. Rather than spending time growing the public sector, policy-makers should instead focus on giving businesses the tools they need to create jobs in the private sector.

This post was originally published by the Pelican Institute.

The Rising Costs of Medicaid Expansion in Louisiana

A recent Associated Press story claimed that Louisiana’s Medicaid program is spending less than expected. Don’t you believe it. By multiple measures, Medicaid expansion has proved a budget buster — with worse outcomes ahead.
Take the claim that “more than $535 million of the less-than-projected spending is in the Medicaid expansion program.” But Medicaid expansion’s enrollment, or costs, have not dipped below projections. Far from it, in fact.

In 2015, the state’s Legislative Fiscal Office estimated that expanding Medicaid eligibility would raise spending on benefits by $5.8 billion over five years under moderate enrollment, or $7.1 billion over five years in a high enrollment scenario — roughly $1.2 to $1.4 billion annually.

Compare those numbers to the Louisiana Department of Health and Hospitals’ January estimate. Instead of costing $3.45 billion this fiscal year, Medicaid expansion will “only” cost taxpayers $2.91 billion. In other words, rather than nearly tripling the 2015 cost estimates, expansion will instead exceed the original high-end projections by a mere 108 percent.

First, the Department of Health’s analysis touting purported “savings” to the state ignores the “woodwork effect” — individuals already eligible for Medicaid who only sign up because of the “hoopla” surrounding expansion. The analysis trumpets the individuals previously enrolled in Medicaid for whom the state can receive a higher federal match, saving the state money. However, it does not examine the opposite phenomenon — whether the publicity surrounding expansion has increased enrollment in populations for which the state must pay a larger share of costs.

In 2015, the Legislative Fiscal Office assumed no “woodwork” effect when analyzing the effects of expansion. But since then, enrollment in Medicaid expansion has skyrocketed. While the Edwards administration first claimed only 300,000 would sign up for expansion, enrollment now exceeds 460,000. A serious fiscal analysis would use the exploding enrollment numbers to study the “woodwork” issue afresh; the Department’s did not.

Second, the analysis also ignores the issue of “crowd-out” — individuals dropping private coverage to enroll in government programs. In 2015, the Legislative Fiscal Office assumed that between 67,000 and 89,000 individuals would drop their private coverage to enroll in “free” Medicaid; that coverage would cost $1.3 billion over five years, $99 million of that coming from the state general fund.

Particularly given the higher than projected enrollment since the 2015 estimate, the department should analyze the costs to taxpayers associated with individuals who dropped private coverage to join a government program. It has not.

Third, the proposed savings rest on a budget gimmick: Providers and insurers agreeing to pay higher taxes — because those “taxes” generate themselves money. The doctors, hospitals and insurers agree to give more funds to the state, the state collects federal Medicaid matching dollars on that money, and then gives both the state and federal funds right back to hospitals and insurers.

If this fiscal maneuvering — providers raising taxes on themselves to obtain more government funding — sounds like a scam to you, you’re not alone. None other than Joe Biden called it as much back in 2011. Other liberal researchers have called the gimmick “egregious” and a “national disgrace.”

President Trump’s budget endorsed legislation that would crack down on this “Medicaid tax gimmick,” and in 2010 the bipartisan Simpson-Bowles commission endorsed eliminating it entirely. With our nation facing trillion-dollar deficits, Washington will soon have to return to fiscal discipline, putting both parts of the Medicaid expansion in Louisiana — Obamacare’s enhanced federal match for able-bodied adults, and the tax gimmick used to pay Louisiana’s portion of expansion costs — under threat.

Far from small or stable, Medicaid expansion in Louisiana has become a sprawling monstrosity built on a fiscal house of cards. Policy-makers should examine ways to unwind the expansion sooner rather than later, before it starts falling down of its own weight.

This post was originally published in the Shreveport Times.

Medicaid Reforms Can Stave Off Louisiana’s Fiscal Cliff

As the old saying goes, when you’re in a hole, stop digging. Unfortunately, Gov. John Bel Edwards keeps digging Louisiana’s fiscal hole deeper, looking for tax increases to “solve” the state’s fiscal shortfall. He should instead examine the massive Medicaid expansion under Obamacare, the spending on which will only add to Louisiana’s budgetary woes.

Only two years ago, Gov. Edwards took office pledging that expanding Medicaid to able-bodied adults—that is, adults of working age without dependents—would see “only” 300,000 individuals added to the government health care rolls. Then, within weeks of taking office, Gov. Edwards revised his numbers upward, claiming that expansion could cover up to 450,000 individuals. But by November 2017—less than eighteen months after the expansion took effect in Louisiana—the state had already exceeded the maximum number of individuals ever projected to enroll in the program.

Louisiana’s explosion in Medicaid enrollment should not come as a surprise, as dozens of other states that expanded Medicaid under Obamacare face the same problem. According to a November 2016 study by the Foundation for Government Accountability, in 24 states that expanded Medicaid, enrollment exceeded maximum projections by an average of 110%.

Unfortunately, this enrollment explosion puts Louisiana’s budget situation in even greater peril. State officials admitted in 2016 that enrollment exceeding 300,000 would reduce the supposed “savings” from Medicaid expansion. As enrollment has now exceeded the even higher projection of 450,000, costs will continue to rise.

Other states that expanded Medicaid before Louisiana have faced similar problems, with rising spending on Medicaid crowding out other important budgetary priorities. One Democratic legislator from New Mexico noted that “The most vulnerable of our citizens—the children, our senior citizens, our veterans, individuals with disabilities—I get concerned that those could be areas that get hit” because of Medicaid expansion.

Medicaid expansion could indeed hurt vulnerable citizens, because it prioritizes the needs of able-bodied adults. Even as Louisiana expanded Medicaid to the able-bodied, the state’s Department of Health and Hospitals advertises a seven year—yes, seven year—wait for individuals with developmental disabilities to be evaluated for personal care services. Any state’s policy that prioritizes coverage of able-bodied adults, yet makes the most vulnerable individuals wait for years and years to receive care, needs a major re-assessment.

As a new Pelican Institute paper makes clear, Louisiana should start phasing out the Medicaid expansion to the able-bodied—both to right the fiscal ship and to right the state’s wrong priorities. The state should freeze enrollment in expansion, allowing those currently participating in the program to remain so long as they stay eligible, while transitioning people into employer-sponsored insurance or other coverage as they lose Medicaid eligibility. One study found that this policy, if implemented nationwide, could save states between $56-64 billion, while generating additional savings for federal taxpayers.

As the state winds down its expansion, lawmakers should work with federal policy-makers to develop a comprehensive waiver program to reform Medicaid in Louisiana. Such a waiver program could include work requirements, to accelerate the transition from welfare to work. But it should also include improvements in care management—providing better care to beneficiaries, and home-based care where possible. Reforming Medicaid could encompass other important elements, including incentives for wellness and healthy behaviors, better coordination with employer-based insurance where applicable, and improved program integrity to crack down on Medicaid fraud.

Louisiana has suffered enough from the near-constant turmoil of annual budget crises. Instead of digging deeper with more taxes and spending, lawmakers should put down their spades, and freeze enrollment in Medicaid expansion. Once they have done so, the state can work to build the reformed and modernized Medicaid program Louisiana desperately needs.

This post was originally published in The Advocate.

Reforming Medicaid in Louisiana

A PDF of this document is available at the Pelican Institute website.

Two years ago, the incoming administration of Gov. John Bel Edwards (D-LA) pledged that expanding Medicaid to able-bodied adults, as permitted under Obamacare, would help solve Louisiana’s ongoing structural budget shortfalls. Unfortunately, the Governor’s promises have not come to fruition. Enrollment in the Medicaid expansion has exceeded projections—as have the costs associated with that expansion. As a result, Louisiana faces a scenario plaguing many states that expanded Medicaid: Rising spending on expansion crowding out other important budgetary priorities like education, transportation, and law enforcement.

Democrats have already proposed a series of tax increases to “solve” the state’s fiscal crisis.[1] But that “solution” misses the point—and won’t actually solve the problem. Rather than raising taxes yet again, to pay for more unaffordable health care spending, Louisiana should both right-size and reform its Medicaid program. Right-sizing the program would involve unwinding the massive expansion to the able-bodied—working-age adults without dependent children—to return Medicaid to serving the populations for which it was originally designed—pregnant women, children, senior citizens, and individuals with disabilities.

After right-sizing the Medicaid program, state leaders should then work to reform and modernize Medicaid for the 21st century. Specifically, Louisiana should work with the Trump Administration to enact a comprehensive Medicaid reform waiver. This waiver could include components to improve coordination of beneficiary care, introduce consumer choice elements into Medicaid, provide a smoother transition to work and employer-based coverage for those who are able to work, and improve program integrity to use scarce taxpayer dollars most effectively.

Individually and collectively, the policy solutions outlined in this paper—unwinding Medicaid expansion and embracing a comprehensive waiver to enact additional reforms—would help put Louisiana on a more sustainable fiscal trajectory, eliminating the need for the tax-and-spend battles of the past several years. By so doing, the state could focus more on enacting reforms necessary for the economy to thrive, bringing jobs back to Louisiana.

 

Massive Expansion

Fewer than two years since Louisiana first expanded Medicaid under Obamacare to able-bodied adults, enrollment in the expansion has already shattered expectations. While officials first projected about 306,000 previously uninsured individuals would gain coverage through expansion, within days of Gov. Edwards signing the executive order authorizing Medicaid expansion, state officials revised their estimates dramatically upward. At that time, officials claimed that as many as 450,000 Louisianans could be added to the Medicaid rolls by expansion.[2] However, even this projection turned out to be an under-estimate, as by December 2017 enrollment reached 456,004, exceeding the higher projection.[3] Louisiana officials admit that, as enrollment exceeds the original 306,000 projection, costs to the state will increase, reducing the state’s supposed fiscal savings.[4]

The fact that Louisiana’s Medicaid expansion has exceeded enrollment projections should come as no surprise. In fact, virtually every state that expanded Medicaid to the able-bodied under Obamacare has seen vastly more enrollees than they had originally planned for. A November 2016 study by the Foundation for Government Accountability (FGA) showed that 24 states’ Medicaid expansion had within two years exceeded projections for the maximum number of individuals that would ever enroll in the Obamacare expansion by an average of 110%.[5]

An earlier report by FGA, issued in April 2015, found that enrollment had exceeded estimates in 17 states. Collectively, those 17 states exceeded their maximum enrollment projections by an average of “only” 61%.[6] By comparison, just eighteen months later, a total of 24 states had exceeded their maximum enrollment projections by more than 110%—amounting to over 6 million enrollees more than projected.[7] More states continue to enroll many more individuals than projected in Medicaid expansion, even after many states already exceeded projections in the expansion’s first year.

The enrollment explosion in “free” Medicaid contrasts with more limited enrollment in Obamacare’s other venue for coverage expansion—health insurance Exchanges. While Medicaid enrollment vastly exceeded projections, as of the 2017 open enrollment period, effectuated Exchange enrollment stood at only 10.3 million individuals.[8] This enrollment figure represents less than half the 23 million individuals the Congressional Budget Office estimated at the time of Obamacare’s enactment would sign up for Exchange coverage in 2017.[9]

Moreover, studies suggest that only individuals who qualify for the most generous subsidies have joined insurance Exchanges in significant numbers. The consulting firm Avalere Health concluded that more than four in five (81%) eligible individuals with incomes of under 150% of the federal poverty level—who qualify for both the richest premiums subsidies and reduced deductibles and co-payments—have signed up for Exchange coverage.[10] By comparison, only about one-sixth (16%) of those with incomes between three and four times the poverty level—who qualify for much smaller premium subsidies, and receive no help with cost-sharing—purchased Exchange coverage.[11] Put simply, while individuals quickly sign up for “free,” or nearly free, health insurance coverage, including through Medicaid, they have signed up much more slowly for health plans for which they must make a financial contribution.

 

Massive—and Rising—Costs

Even prior to Obamacare, Medicaid had grown exponentially over the past several decades to become a larger and larger share of Louisiana’s state budget. In fiscal year 1985, Medicaid represented 8.9% of Louisiana’s total budgetary expenditures.[12] Thirty years later, in fiscal year 2015, Medicaid had more than tripled as a share of the state budget, rising to 27.6% of total expenditures.[13]

The rising tide of Medicaid spending in Louisiana echoes national trends. In fiscal year 1985, Medicaid consumed an average of 9.7% of total state expenditures across all 50 states.[14] By comparison, in fiscal year 2013, the last year before Obamacare’s expansion took effect, Medicaid represented an average of 24.4% of state spending.[15] Over a quarter-century, then, Medicaid spending more than doubled as a share of state spending—before most of Obamacare’s effects kicked in.

However, even when compared to other states, Louisiana suffered from skyrocketing Medicaid spending prior to Obamacare expansion taking effect. The Pew Charitable Trusts noted that, during the years 2000-2015, Medicaid grew the fastest in Louisiana when measured as a share of the state’s own spending. During that time, Medicaid grew by 12.8 percentage points—from 10.5% of the state’s spending to 23.3% of state dollars.[16] As a result of that growth in Medicaid spending, Louisiana was the state most dependent on federal funds in fiscal year 2015, using money from Washington to comprise 42.2% of its budget—again, before Obamacare’s Medicaid expansion ever took effect in Louisiana.[17]

States like Louisiana that chose to expand Medicaid to the able-bodied face additional rising costs, due to both higher than expected enrollment in Medicaid expansion and higher than expected per-beneficiary spending for those expansion enrollees. In late 2016, the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary released its annual report on the state of the Medicaid program. The report found that, contrary to projections that expansion enrollees would have per-beneficiary costs lower than previously eligible Medicaid beneficiaries, states actually faced higher per-beneficiary costs for the expansion population than their prior enrollees.[18] In 2016, expansion enrollees cost the Medicaid program an average of $5,926, compared to average spending of $5,215 for non-expansion adults.[19]

The higher spending on Medicaid expansion enrollees has now persisted for several years, contrary to predictions before the coverage expansion took effect. At first, the CMS actuary thought that the higher spending came from pent-up demand for health care—previously uninsured enrollees using their newfound Medicaid coverage to cover heretofore-neglected health conditions.[20] However, the 2014, 2015, and 2016 annual reports on Medicaid all demonstrated higher per-beneficiary spending for expansion populations than those eligible prior to Obamacare.[21]

Echoing the national trends, Medicaid per-beneficiary spending in Louisiana remains higher for expansion enrollees than previously eligible beneficiaries. State officials admit that in fiscal year 2017, spending for expansion enrollees totaled $6,712 per adult—more than 20% higher than the $5,575 spent on non-expansion enrollees.[22] Liberal supporters of the expansion claim that the disparity arises from pent-up demand by new enrollees—the same assumption federal actuaries made.[23] However, the higher spending by expansion enrollees over several years at the federal level suggests that higher spending by expansion enrollees may persist in Louisiana as well.

With enrollment higher than initial projections, and spending on those new enrollees averaging more than anticipated, many states now face fiscal crises brought on by their Medicaid expansions. Under the Obamacare statute, states began to pay a share of the costs for the Medicaid expansion in calendar year 2017. Moreover, states’ 5% share of expansion enrollees’ health costs in 2017 will double over the next few years, rising to 6% in calendar year 2018, 7% in calendar year 2019, and 10% in calendar year 2020.[24] Given the vast sums that states already devote to their Medicaid programs, paying five percent—let alone ten percent—of expansion costs will add significant new stresses to state budgets.

Even as Louisiana expanded Medicaid to the able-bodied, other states began facing expansion’s negative effects, with budget shortfalls looming because the expansion exceeded projected costs. Kentucky’s estimated costs of expansion in fiscal years 2017 and 2018 rose from $107 million to $257 million—a more than doubling of costs that will take money away from other state priorities like education, transportation, or law enforcement.[25] Likewise, Ohio’s budget for Medicaid expansion more than doubled compared to the state’s prior projections, leaving legislators scrambling to cut money from other programs to stem the shortfall.[26]

With Medicaid expansion squeezing state budgets, even Democratic state legislators across the country have contemplated what some liberals might consider apostasy—scaling back and right-sizing the Medicaid program to reflect competing fiscal priorities. Consider comments from New Mexico state senator Howie Morales, a Democrat:

When you’re looking at a state budget and there are only so many dollars to go around, obviously it’s a concern. The most vulnerable of our citizens—the children, our senior citizens, our veterans, individuals with disabilities—I get concerned that those could be areas that get hit.[27]

Other legislators agree, with an Oregon Democratic State Senator reflecting on his state’s $500 million budget shortfall by stating that “the only way to keep this [budget situation] manageable is to keep those costs under control, get people off Medicaid.”[28]

The growth in Medicaid spending has resulted in cascading effects across states—including in Louisiana. As the state’s budget history demonstrates, a dollar of spending on Medicaid results in fewer dollars for other programs. For instance, as the share of Louisiana’s budget devoted to Medicaid more than tripled from 1985 through 2015, the share of the budget dedicated to primary and secondary education fell from 23.5% to 18.8%, the share dedicated to higher education fell from 10.9% to 9.9%, and the share dedicated to transportation fell by half, from 11.2% to 5.6%.[29] If Louisiana continues down its current path, schools, universities, and roads will face a continued squeeze as Medicaid consumes more and more state resources.

Moreover, the current Medicaid-imposed woes that states face assume that the enhanced federal match remains static—a far from safe assumption. With the federal debt recently topping $20 trillion, the belief that Washington will continue to pay 90 percent of states’ expansion costs in 2020 and every year thereafter may strike some as an overly rosy scenario.[30] Indeed, President Obama himself once proposed reducing the federal Medicaid match by $100 billion over ten years through a so-called “blended rate” policy.[31] Only an outcry from liberals, combined with the 2012 Supreme Court ruling that made Medicaid expansion optional for states, eventually persuaded President Obama to abandon the proposal.[32] However,  given Washington’s own dire fiscal situation, the concept could well return in future years.

More recently, Congress has begun taking action to rein in another enhanced match provided to states as part of Obamacare. Specifically, Section 2101 of the law provided a 23 percent increase in the federal match to State Children’s Health Insurance Programs (SCHIP) across the country.[33] As a result of the increase, Louisiana’s SCHIP match rate in the current fiscal year ending September 30 stands at 97.58%, instead of the usual 74.58%.[34] A total of 12 states, plus the District of Columbia, currently receive a 100% match for their SCHIP programs, meaning the federal government effectively funds all of the health costs of these states’ SCHIP enrollees.[35]

However, the costs of the enhanced federal SCHIP match on Washington’s budget have led Congress to eliminate that enhanced match within the next few years.  SCHIP legislation signed into law earlier this month will phase out the enhanced match—lowering the 23 percent match to 11.5 percent in fiscal year 2020, while eliminating it altogether in fiscal 2021.[36] With bipartisan agreement within Congress on eliminating Obamacare’s enhanced SCHIP match rate, state lawmakers would do well to consider whether and when Congress will likewise eliminate the enhanced match for Obamacare’s Medicaid expansion to the able-bodied.

 

Difficulties for the Most Vulnerable

In addition to skyrocketing enrollment and costs, the Medicaid expansion has hurt some of the most vulnerable Americans in society, because Obamacare effectively gives state programs financial incentives to discriminate against individuals with disabilities.[37] Traditionally, the federal government provides states with a Medicaid match through a statutory formula comparing a state’s average income to the national average. For their traditional beneficiaries—that is, pregnant women, children, the aged, medically frail, and individuals with disabilities—states receive a federal Medicaid match ranging from 50% to 83%. For the current fiscal year, Louisiana will receive a 63.69% match rate for these populations.[38]

However, as noted above, Obamacare gives states a much greater federal match to cover its expansion population—individuals with incomes of under 138 percent of the poverty level ($34,638 for a family of four in 2017). For calendar year 2017, states received a 95% federal match, which will fall slightly to 94% in 2018, 93% in 2019, and 90% in 2020.[39] Put another way, Louisiana will receive over 30 cents more on the dollar from the federal government to cover the expansion population this year than it will to cover traditional beneficiaries eligible for Medicaid prior to Obamacare.

This yawning disparity in the federal match favoring expansion enrollees over traditional beneficiaries comes despite noteworthy characteristics of the individuals who qualify for Obamacare’s Medicaid expansion. Specifically, the liberal Urban Institute found that nationwide, 82.4% of the expansion population consisted of able-bodied adults of working age.[40] In Louisiana, nearly three-quarters (74.9%) of projected expansion enrollees represented adults without dependent children.[41]

In other words, the federal government offers—and under the current governor, Louisiana accepted—an arrangement whereby states receive a significantly greater federal match to provide services to able-bodied adults of working age than to provide services to the individuals for whom Medicaid was traditionally designed: The medically frail, aged, and individuals with disabilities. Moreover, this disparity comes as many of the latter need critically important services, which they cannot currently obtain from Louisiana’s Medicaid program.

While the federal Medicaid statute requires state programs to provide medical coverage to individuals with disabilities, it does not require them to provide personal care services outside a nursing home setting. Because the law makes such home and community-based services (HCBS) optional, states can utilize waiting lists to control access to such services—and many, including Louisiana, do just that. Overall, more than 640,000 individuals with disabilities remain on lists waiting to access HCBS nationwide—including 62,828 in Louisiana.[42]

Prior to Louisiana accepting Obamacare’s Medicaid expansion to the able-bodied, the state prioritized coverage for individuals with disabilities. Instead of pushing to expand Medicaid under Obamacare, efforts instead focused on providing funds necessary to reduce the state’s HCBS waiting list for individuals with disabilities.[43] However, the current administration has taken the exact opposite tack—prioritizing an expansion of coverage for the able-bodied over the personal care needs of the most vulnerable Louisianans. As a result, able-bodied adults with low incomes can qualify for Medicaid immediately, while individuals with developmental disabilities must wait an average of seven years just to be evaluated for home-based care for their personal needs.[44]

Several states that expanded Medicaid under Obamacare before Louisiana provide evidence of the damage that expansion has caused for society’s most vulnerable. In Arkansas, while Gov. Asa Hutchinson pledged to reduce his state’s HCBS waiting lists in half under his administration, the rolls have risen 25 percent—even as the state continues its Medicaid expansion to the able-bodied.[45] Since the state expanded Medicaid to the able-bodied, at least 79 individuals with disabilities have died while on waiting lists seeking access to home-based care.[46]

Vulnerable residents in other states have likewise suffered as a result of Obamacare’s Medicaid expansion. In Ohio, the administration of Gov. John Kasich reduced eligibility for 34,000 individuals with disabilities, even while expanding Medicaid to the able-bodied.[47] In Illinois, lawmakers voted to allow Cook County to expand Medicaid early on the same day in which they also voted to reduce medication access for individuals with disabilities.[48] In that state, at least 752 residents with disabilities have died awaiting access to home-based care since the state embraced Obamacare’s Medicaid expansion.[49]

The claims of its proponents to the contrary, any policy that prioritizes able-bodied adults over the most vulnerable in society represents the antithesis of compassion. As more and more individuals crowd on to the Medicaid rolls, literally hundreds of thousands of individuals with disabilities wait for access to care—and in some cases, die well before they receive it. Any compassionate society should focus its greatest efforts on protecting the most vulnerable, meaning no state should expand Medicaid to the able-bodied without first having eliminated entirely its waiting list of individuals with disabilities seeking home-based care.

While disadvantaging the most vulnerable in society, who literally wait for years for access to personal care paid for by Medicaid, expansion of the Medicaid entitlement also disadvantages the expansion’s purported beneficiaries—able-bodied adults within working age—in several respects. Medicaid generally provides poorer health outcomes than most other forms of coverage, such that some analysts have questioned whether its patients fare worse than the uninsured.[50]

In general, states provide low reimbursement levels to doctors and hospitals treating Medicaid patients, in large part due to the fiscal pressures discussed above. However, these low reimbursement rates mean many medical providers do not accept Medicaid patients. One study found that specialty physicians denied appointments for two-thirds of Medicaid patients, compared to only an 11% denial rate for patients with private insurance. Moreover, “the average wait time for Medicaid” enrollees who did obtain an appointment “was 22 days longer than that for privately insured children.”[51] Through their “secret shopper” survey, the authors “found a disparity in access to outpatient specialty care between children with public insurance and those with private insurance.”

Louisiana does not deviate from the general pattern of state Medicaid programs providing poor reimbursements to physicians, as the state’s reimbursement levels stand slightly below the already low national average. Overall, the state pays physicians 70% of Medicare reimbursement levels, below the national Medicaid average of 72% of Medicare levels.[52] In primary care, Louisiana reimburses doctors at 67% of Medicare rates, one percentage point above the national average of 66%.[53] And in obstetrics, Louisiana reimburses doctors 70% of Medicare rates, eleven points below the national Medicaid average of 81%.[54] The comparatively paltry rates that Louisiana pays obstetricians come despite the fact that nearly two-thirds (65%) of babies born in the state in 2015 (i.e., before Medicaid expansion took effect) were paid for by Medicaid—the third highest rate of births paid for by Medicaid nationwide.[55]

The lack of access to physician care helps explain Medicaid’s middling performance in improving health outcomes. Most notably, the Oregon Health Insurance Experiment—which compared the health of individuals randomly selected to enroll in Medicaid with those who remained uninsured—found no measurable improvement in physical outcomes for the former group when compared to the latter.[56] The Oregon study also found that Medicaid beneficiaries utilized the emergency room 40 percent more than uninsured patients, a difference which persisted over time. These data suggest that patients lack a usual access to primary care that could alleviate medical conditions before necessitating emergency treatment—a further indication that Medicaid leaves much to be desired as a form of health coverage.[57]

Both Medicaid administrators and beneficiaries acknowledge the program’s shortcomings in providing access to care. One former program head called a Medicaid card a “hunting license”—a government-granted permission slip allowing beneficiaries to try to find a physician who will treat them.[58] With beneficiaries not even considering Medicaid “real insurance,” some would question the wisdom of consigning such a large—and growing—number of individuals to a program that provides such an uneven quality of care.[59]

 

Discouraging Work

In addition to providing beneficiaries with poor quality care, Medicaid expansion includes an in-built “poverty trap” that discourages entrepreneurship and social advancement. Specifically, the law includes numerous effects that will discourage work, and ultimately keep low-income individuals trapped in poverty for longer periods, while also stunting economic growth. According to the Congressional Budget Office (CBO), the Medicaid expansion represents one part of a larger Obamacare scheme that will reduce the labor supply nationally by the equivalent of 2.5 million full-time jobs by 2024.[60]

CBO believes that Medicaid expansion will reduce overall incentives to work. Most notably, Medicaid expansion creates an “income cliff,” whereby one additional dollar of income will cause a family to lose Medicaid eligibility entirely—subjecting them to hundreds, if not thousands, of dollars in health insurance premiums, deductibles, and co-payments as a result. As a result, CBO believes that the expansion will reduce beneficiaries’ labor force participation by about 4 percent by “creat[ing] a tax on additional earnings for those considering job changes.”[61] In other words, individuals will specifically avoid seeking a promotion, additional hours, or a bonus, because it will cause them to lose eligibility for Medicaid—the definition of a “poverty trap” that discourages low-income individuals from advancing their social strata.

Data from the liberal Urban Institute released prior to Obamacare taking effect suggest that most beneficiaries who qualify for Medicaid expansion represent individuals who could be in work, or preparing for work. In Louisiana, more than seven in eight adults who qualify for the expansion are of prime working age—either ages 19-24 (24.5%), 25-34 (25.7%), or 35-54 (37.4%).[62] With nearly three-quarters of Louisianans who qualify for expansion adults without dependent children, as noted above, many of these individuals should be able to work, or prepare for work.

Unfortunately, national data suggest that most beneficiaries enrolled in Medicaid are not working. Specifically, 2015 Census Bureau data indicate that more than half (52%) of non-disabled, working-age Medicaid beneficiaries are not working.[63] Only about one in six (16%) non-disabled Medicaid beneficiaries work full-time year-round, while about one in three (32%) work part-time, or for part of the year.[64]

If able-bodied individuals who currently qualify for Obamacare’s Medicaid expansion pursued full-time employment, many of them would no longer qualify for the expansion. The expansion applies to individuals with household income below 138 percent of the federal poverty level—which in 2018 equals $16,753 for a single individual, $22,715 for a couple, and $34,638 for a family of four.[65] At these levels, a couple each working 35 hours per week, 50 weeks per year, making the federal minimum wage of $7.25 per hour, or an individual working 40 hours per week, 50 weeks per year, making $8.50 per hour, would earn enough income to exceed the Medicaid eligibility thresholds.

While CBO believes Medicaid expansion will discourage work, evidence suggests that unwinding the expansion would increase employment, and employment-related search activity. A study of the Medicaid program in Tennessee, where the state scaled back the program in 2005 due to significant cost overruns, found that the reduction in Medicaid eligibility encouraged beneficiaries to look for work, and ultimately increased employment, as individuals looked for employment-based coverage.[66] Whereas Obamacare’s skewed incentives discourage work, scaling back Medicaid expansion could have salutary economic effects, by expanding the labor force in ways that could grow the economy.

 

What Lawmakers Should Do

The evidence shows the damage caused by Medicaid expansion, both in Louisiana and across the country. Soaring enrollment and higher-than-expected costs have led to fiscal crises in many states—crises that will only grow as states’ share of expansion costs increase in the coming years. Meanwhile, the urgent needs of many vulnerable citizens have taken a back seat, as Obamacare gives states more incentives to cover able-bodied adults than individuals with disabilities.

As the legislature considers its policy options, it should focus on both short-term and long-term solutions. In the short term, Louisiana should begin the process of winding down the Medicaid expansion to able-bodied adults, as one way of alleviating immediate budgetary pressures. In the longer term, the state should take advantage of the flexibility promised by the Trump Administration to consider more innovative reforms to the Medicaid program.

Enrollment Freeze:              The best way to end the high costs associated with the Medicaid expansion would involve freezing enrollment to new entrants.[67] Such a policy would allow individuals who already qualified for the expansion to remain as long as they maintain eligibility for the program. This proposal, passed by legislators in places like Ohio and Arkansas, would provide an orderly wind-down of the expansion, reducing costs to the state over time, while allowing people to transition into employer-sponsored insurance or other coverage as they lose Medicaid eligibility. [68]

One study released in early 2017 calculated the savings from a nationwide Medicaid freeze beginning in fiscal year 2018. Over a decade, this Medicaid freeze would generate approximately $56-64 billion in savings to state Medicaid programs, along with more than half a trillion dollars in savings to the federal government.[69] These savings would come without terminating Medicaid participation for a single beneficiary currently eligible for the program. The sizable savings provided to both the states and the federal government under a potential Medicaid freeze illustrates the need to wind down Medicaid’s expansion to the able-bodied in an orderly way, to restore the program’s focus to the populations for which it was originally intended.

Comprehensive Waiver:     Last March, then-Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma sent a letter to the nation’s governors indicating their desire to expand state flexibility within the Medicaid program.[70] Since then, several organizations have published reports highlighting elements and policies that states could use to reform their Medicaid programs.[71] A bold waiver incorporating many of these policies could transform Medicaid programs across the country.

Louisiana should consider submitting a comprehensive waiver request to CMS. Such a waiver could include:

Consumer-Oriented Options:              Using Health Savings Account-like mechanisms would encourage beneficiaries to serve as smart shoppers of health care—generating savings that they could use once they leave the Medicaid program. Whether through Health Opportunity Accounts—an innovation passed by Congress in 2005, but effectively repealed under the Obama Administration—“right-to-shop” programs that give beneficiaries a chance to share in the savings from obtaining lower costs for non-emergency medical procedures, or other programs, giving beneficiaries financial incentives to act as smart health care consumers could benefit them as well as the Medicaid program.[72]

Wellness Incentives:                As with the consumer options above, providing incentives for healthy behaviors would encourage beneficiaries to improve their health, while giving them a potential source of financial savings. During the debate on Obamacare in 2009-10, wellness incentives proved one of the few sources of bipartisan agreement, thanks to the way in which Safeway and other firms reduced health costs through such reforms.[73] Particularly given the state’s high rates of obesity, Louisiana should consider bringing the “Safeway model” to the state’s Medicaid program.[74]

Premium Assistance:               Providing more flexible benefits to individuals with an offer of employer-sponsored coverage would allow Medicaid to supplement that coverage, thereby reducing costs and giving individuals access to higher-quality private insurance. Other policies in this vein might include a beneficiary waiting period designed to prevent “crowd-out”—individuals dropping private coverage to enroll in government programs—and Health Savings Account coverage, currently prohibited under two separate premium assistance programs.[75] These changes would help beneficiaries make a smoother transition off of the Medicaid rolls and into a life of work.

Home and Community-Based Services:             Focusing on ways to deliver care to beneficiaries outside of nursing homes could reduce costly Medicaid spending in institutional settings. Most importantly, it would enable patients to stay in their homes—most beneficiaries’ desired outcome. For instance, a state waiver could cap the number of nursing home slots available, or require beneficiaries to try receiving care at home prior to entering a nursing facility.[76] Collectively, these policies should create an affirmative bias in favor of care at home, rather than care at a nursing institution.

Work Requirements:               Unlike the Obama Administration, the Trump Administration has indicated a willingness to accept work requirements as part of a Medicaid waiver request.[77] Earlier this month, CMS issued a letter to state Medicaid directors indicating parameters to guide states as they prepare community engagement requirements—a document that reiterated the positive effects that work can have on beneficiaries’ economic success, self-sufficiency, and overall health.[78] Requiring that appropriate adult populations either work, look for work, or prepare for work, while exempting individuals with disabilities and other medically frail individuals, would further promote a transition from welfare into work.

Program Integrity:     Verifying eligibility on a regular basis would ensure that state and federal resources remain targeted to those most in need—an important priority given the way in which scam artists in Louisiana have sought to abuse the Medicaid program.[79] Increasing penalties for fraud would halt scam artists, and could lower Medicaid’s rate of improper payments.[80] More robust asset recovery measures—ensuring Medicaid remains the payer of last resort, not that of first instance—would help preserve scarce state and federal resources for those who need them most.[81]

The state of Rhode Island demonstrates the power of a comprehensive waiver to transform a Medicaid program. Its global compact waiver, approved in the waning days of President George W. Bush’s Administration in January 2009, allowed that state to improve Medicaid by providing more, better, and more timely care to beneficiaries. Thanks to the global compact waiver, Rhode Island actually reduced its per beneficiary Medicaid costs in absolute (i.e., before-inflation) terms over a four-year period[82]—and did so not by cutting access to care, but by improving it.[83] The success of the Rhode Island experiment illustrates the way in which Medicaid reform, done right, can simultaneously save money and improve health—a lesson the legislature should look to bring to Louisiana.

 

Conclusion

Given the state’s structural budget shortfall, and the significant costs associated with Medicaid expansion, Louisiana stands at a turning point. The legislature could continue down their current path, and hope that yet another series of tax increases will sate the growing health care costs that threaten to consume the state’s entire budget.

Thankfully, legislators have another option. Unwinding the Medicaid expansion gradually, while laying the groundwork to submit a comprehensive Medicaid waiver request to CMS, would in combination help turn the fiscal tide. Freezing Medicaid enrollment for able-bodied adults would re-direct the program towards the most vulnerable in society—those for whom Medicaid was originally designed. Likewise, a comprehensive waiver would re-orient and update Medicaid for a 21st century health care system, saving money by providing better care.

Given the two options, the choice for Louisiana seems clear. The state should use the flexibility promised by Washington to unwind Medicaid expansion for the able-bodied, and modernize and re-orient the program toward the program’s original intended beneficiaries. By so doing, the state can go a long way towards resolving its structural fiscal shortfalls, while also improving the care provided to some of Louisiana’s most vulnerable residents.

 

[1] Melinda Deslatte, “Louisiana Governor Offers Tax Ideas to Close $1 Billion Budget Gap,” Associated Press December 18, 2017, https://apnews.com/58833e0c265f4de6b26e465004c01c25/Louisiana-governor-offer.

[2] Kevin Litten, “Louisiana’s Medicaid Expansion Enrollment Could Grow to 450,000,” Times-Picayune January 20, 2016, http://www.nola.com/politics/index.ssf/2016/01/medicaid_expansion_500000.html.

[3] Louisiana Department of Health, “Louisiana Medicaid Expansion Dashboard,” http://www.ldh.la.gov/HealthyLaDashboard.

[4] Litten, “Louisiana’s Medicaid Expansion Enrollment Could Grow.”

[5] Jonathan Ingram and Nicholas Horton, “Obamacare Expansion Enrollment Is Shattering Projections,” Foundation for Government Accountability, November 16, 2016, https://thefga.org/download/ObamaCare-Expansion-is-Shattering-Projections.PDF, p. 5.

[6] Jonathan Ingram and Nicholas Horton, “The Obamacare Expansion Enrollment Explosion,” Foundation for Government Accountability,” April 20, 2015, https://thefga.org/wp-content/uploads/2015/04/ExpansionEnrollmentExplosion-Final3.pdf.

[7] Ingram and Horton, “Obamacare Expansion Enrollment Is Shattering Projections.”

[8] Centers for Medicare and Medicaid Services, “2017 Effectuated Enrollment Snapshot,” June 12, 2017, https://downloads.cms.gov/files/effectuated-enrollment-snapshot-report-06-12-17.pdf. Effectuated enrollment represents coverage for which individuals have both selected an insurance plan and paid at least one month’s premium.

[9] Congressional Budget Office, estimate of H.R. 4872, Health Care and Education Reconciliation Act, in concert with H.R. 3590, Patient Protection and Affordable Care Act, March 20, 2010, https://www.cbo.gov/sites/default/files/111th-congress-2009-2010/costestimate/amendreconprop.pdf, Table 4, p. 21.

[10] Avalere Health, “The State of Exchanges: A Review of Trends and Opportunities to Grow and Stabilize the Market,” report for Aetna, October 2016, http://go.avalere.com/acton/attachment/12909/f-0352/1/-/-/-/-/20161005_Avalere_State%20of%20Exchanges_Final_.pdf, Figure 3, p. 6.

[11] Ibid.

[12] National Association of State Budget Officers, “The State Expenditure Report,” July 1987, https://higherlogicdownload.s3.amazonaws.com/NASBO/9d2d2db1-c943-4f1b-b750-0fca152d64c2/UploadedImages/SER%20Archive/ER_1987.PDF, Medicaid Expenditures as a Percentage of Total Expenditures, p. 30.

[13] National Association of State Budget Officers, “State Expenditure Report,” November 2016, https://higherlogicdownload.s3.amazonaws.com/NASBO/9d2d2db1-c943-4f1b-b750-0fca152d64c2/UploadedImages/SER%20Archive/State%20Expenditure%20Report%20(Fiscal%202014-2016)%20-%20S.pdf, Table 5: State Spending by Function as a Percentage of Total State Expenditures, p. 13.

[14] National Association of State Budget Officers, “The State Expenditure Report.”

[15] National Association of State Budget Officers, “Fiscal Survey of States: Spring 2014,” https://higherlogicdownload.s3.amazonaws.com/NASBO/9d2d2db1-c943-4f1b-b750-0fca152d64c2/UploadedImages/Fiscal%20Survey/NASBO%20Spring%202014%20Fiscal%20Survey%20(security).pdf, p. xi.

[16] Pew Charitable Trusts, “Fiscal 50: State Trends and Analysis,” http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind7, Change in State Medicaid Spending as a Share of Own-Source Revenue, 2000 and 2015.

[17] Ibid., http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind1, Percentage of State Revenue from Federal Funds, Fiscal Year 2015.

[18] For an analysis of the ways that the CMS actuary and the Congressional Budget Office have changed their baseline projections of Medicaid spending over time, see Brian Blase, “Evidence Is Mounting: The Affordable Care Act Has Worsened Medicaid’s Structural Problems,” Mercatus Center, September 2016, https://www.mercatus.org/system/files/mercatus-blase-medicaid-structural-problems-v1.pdf, pp. 15-20.

[19] Centers for Medicare and Medicaid Services Office of the Actuary, “2016 Actuarial Report on the Financial Outlook for Medicaid,” report to Congress, 2016, https://www.medicaid.gov/medicaid/financing-and-reimbursement/downloads/medicaid-actuarial-report-2016.pdf, p. 22.

[20] Centers for Medicare and Medicaid Services Office of the Actuary, “2014 Actuarial Report on the Financial Outlook for Medicaid,” report to Congress, 2014, https://www.medicaid.gov/medicaid/financing-and-reimbursement/downloads/medicaid-actuarial-report-2014.pdf, pp. 36-38.

[21] Centers for Medicare and Medicaid Services Office of the Actuary, “2015 Actuarial Report on the Financial Outlook for Medicaid,” report to Congress, 2015, https://www.medicaid.gov/medicaid/financing-and-reimbursement/downloads/medicaid-actuarial-report-2015.pdf, p. 27.

[22] Cited in Jeanie Donovan, “Setting the Record Straight on Medicaid,” Louisiana Budget Project, August 4, 2017, http://www.labudget.org/lbp/2017/08/setting-the-record-straight-on-medicaid/.

[23] Ibid.

[24] 42 U.S.C. 1396d(y)(1), as codified by Section 2001(a) of the Patient Protection and Affordable Care Act, P.L. 111-148.

[25] Christina Cassidy, “Rising Cost of Medicaid Expansion is Unnerving Some States,” Associated Press October 5, 2016, http://bigstory.ap.org/article/4219bc875f114b938d38766c5321331a/rising-cost-medicaid-expansion-unnerving-some-states.

[26] Ibid.

[27] Christina Cassidy, “Medicaid Enrollment Surges, Stirs Worry about State Budgets,” Associated Press July 19, 2015, http://www.bigstory.ap.org/article/c158e3b3ad50458b8d6f8f9228d02948/medicaid-enrollment-surges-stirs-worry-about-state-budgets.

[28] Ibid.

[29] “The State Expenditure Report,” Primary and Secondary Education Expenditures as a Percentage of Total Expenditures, Higher Education Expenditures as a Percentage of Total State Expenditures, and Transportation Expenditures as a Percentage of Total State Expenditures; “State Expenditure Report,” Table 5: State Spending by Function.

[30] United States Treasury, “The Debt to the Penny and Who Holds It,” total public debt outstanding as of October 26, 2017, https://www.treasurydirect.gov/NP/debt/current.

[31] White House Office of the Press Secretary, “Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility,” April 13, 2011, https://obamawhitehouse.archives.gov/the-press-office/2011/04/13/fact-sheet-presidents-framework-shared-prosperity-and-shared-fiscal-resp.

[32] NFIB v. Sebelius, 567 U.S. 519 (2012), https://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf; Sam Baker, “White House Drops Support for Major Medicaid Cut,” The Hill December 10, 2012, http://thehill.com/policy/healthcare/272041-white-house-drops-support-for-major-medicaid-cut; Centers for Medicare and Medicaid Services, “Frequently Asked Questions on Exchanges, Market Reforms, and Medicaid,” December 10, 2012, https://www.cms.gov/CCIIO/Resources/Files/Downloads/exchanges-faqs-12-10-2012.pdf.

[33] 42 U.S.C. 1397ee(b), as amended by Section 2101(a) of PPACA.

[34] Department of Health and Human Services, “Federal Financial Participation in State Assistance Expenditures,” Federal Register November 15, 2016, pp. 80078-80080, Table 1, https://www.gpo.gov/fdsys/pkg/FR-2016-11-15/pdf/2016-27424.pdf.

[35] Ibid.

[36] Section 3005 of the HEALTHY KIDS Act, P.L. 115-120.

[37] See also Chris Jacobs, “How Obamacare Undermines American Values: Penalizing Work, Citizenship, Marriage, and the Disabled,” Heritage Foundation Backgrounder No. 2862, November 21, 2013, http://www.heritage.org/research/reports/2013/11/how-obamacare-undermines-american-values-penalizing-work-marriage-citizenship-and-the-disabled.

[38] “Federal Financial Participation in State Assistance Expenditures.”

[39] 42 U.S.C. 1396d(y)(1), as codified by Section 2001(a) of PPACA.

[40] Genevieve M. Kenney et al., “Opting in to the Medicaid Expansion Under the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage?” Urban Institute, August 2012, http://www.urban.org/sites/default/files/alfresco/publication-pdfs/412630-Opting-in-to-the-Medicaid-Expansion-under-the-ACA.PDF, p. 9, Appendix Table 2.

[41] Ibid.

[42] Kaiser Family Foundation, “Waiting List Enrollment for Medicaid Section 1915(c) Home- and Community-Based Services Waivers,” Kaiser Commission on Medicaid and the Uninsured 2015 survey, http://kff.org/health-reform/state-indicator/waiting-lists-for-hcbs-waivers/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.

[43] Bobby Jindal, “Obamacare Is Anything But Compassionate,” Politico February 9, 2014, http://www.politico.com/magazine/story/2014/02/obamacare-costs-jobs-hurts-most-vulnerable-103299?paginate=false.

[44] Louisiana Department of Health and Hospitals, “Medicaid Waiver Services,” http://www.dhh.la.gov/index.cfm/page/1555.

[45] Jason Pederson, “Waiver Commitment Wavering,” KATV June 15, 2016, http://katv.com/community/7-on-your-side/waiver-commitment-wavering.

[46] Chris Jacobs, “Obamacare Takes Care from Disabled People to Subsidize Able-Bodied, Working-Age Men,” The Federalist November 18, 2016, http://thefederalist.com/2016/11/18/obamacare-takes-care-disabled-people-subsidize-able-bodied-working-age-men/.

[47] Ibid.

[48] Nicholas Horton, “Illinois’ Medicaid Expansion Enrollment Continues to Climb, Putting Vulnerable at Risk,” Illinois Policy Institute, November 1, 2016, https://www.illinoispolicy.org/illinois-medicaid-expansion-enrollment-continues-to-climb-putting-vulnerable-at-risk/.

[49] Nicholas Horton, “Hundreds on Medicaid Waiting List in Illinois Die While Waiting for Care,” Illinois Policy Institute, November 23, 2016, https://www.illinoispolicy.org/hundreds-on-medicaid-waiting-list-in-illinois-die-while-waiting-for-care-2/.

[50] Scott Gottlieb, “Medicaid Is Worse than No Coverage at All,” Wall Street Journal March 10, 2011, http://www.wsj.com/articles/SB10001424052748704758904576188280858303612.

[51] Joanna Bisgaier and Karin Rhodes, “Auditing Access to Specialty Care for Children with Public Insurance,” New England Journal of Medicine June 16, 2011, http://www.nejm.org/doi/full/10.1056/NEJMsa1013285.

[52] Stephen Zuckerman, et al., “Medicaid Physician Fees after the ACA Primary Care Fee Bump,” Urban Institute March 2017, https://www.urban.org/sites/default/files/publication/88836/2001180-medicaid-physician-fees-after-the-aca-primary-care-fee-bump_0.pdf, Table 1, p. 5.

[53] Ibid.

[54] Ibid.

[55] Kaiser Family Foundation, “Births Financed by Medicaid,” State Health Facts, https://www.kff.org/medicaid/state-indicator/births-financed-by-medicaid/?currentTimeframe=0&sortModel=%7B%22colId%22:%22%25%20Births%20Financed%20by%20Medicaid%22,%22sort%22:%22desc%22%7D.

[56] Katherine Baicker, et al., “The Oregon Experiment—Effects of Medicaid on Clinical Outcomes,” New England Journal of Medicine May 2, 2013, http://www.nejm.org/doi/full/10.1056/NEJMsa1212321.

[57] Amy Finklestein et al., “Effect of Medicaid Coverage on ED Use—Further Evidence from Oregon’s Experiment,” New England Journal of Medicine October 20, 2016, http://www.nejm.org/doi/full/10.1056/NEJMp1609533.

[58] Statement by DeAnn Friedholm, Consumers Union, at Alliance for Health Reform Briefing on “Affordability and Health Reform: If We Mandate, Will They (and Can They) Pay?” November 20, 2009, http://www.allhealthpolicy.org/wp-content/uploads/2016/12/TranscriptFINAL-1685.pdf, p. 40.

[59] Vanessa Fuhrmans, “Note to Medicaid Patients: The Doctor Won’t See You,” Wall Street Journal July 19, 2007, https://www.wsj.com/articles/SB118480165648770935.

[60] Congressional Budget Office, “The Budget and Economic Outlook: 2014 to 2024,” February 2014, http://cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014_Feb.pdf, Appendix C: Labor Market Effects of the Affordable Care Act: Updated Estimates, pp. 117-27.

[61] Edward Harris and Shannon Mok, “How CBO Estimates Effects of the Affordable Care Act on the Labor Market,” Congressional Budget Office Working Paper 2015-09, December 2015, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/workingpaper/51065-ACA_Labor_Market_Effects_WP.pdf, p. 12.

[62] Kenney, “Opting in to the Medicaid Expansion,” Appendix Table 1, p. 8.

[63] Cited in Nic Horton and Jonathan Ingram, “The Future of Medicaid Reform: Empowering Individuals Through Work,” Foundation for Government Accountability, November 14, 2017, https://thefga.org/wp-content/uploads/2017/11/The-Future-of-Medicaid-Reform-Empowering-Individuals-Through-Work.pdf, p. 4.

[64] Ibid.

[65] Department of Health and Human Services, notice regarding “Annual Update of the HHS Poverty Guidelines,” Federal Register January 18, 2018, https://www.gpo.gov/fdsys/pkg/FR-2018-01-18/pdf/2018-00814.pdf, , pp. 2642-44.

[66] Craig Garthwaite, Tal Gross, and Matthew Notowidigdo, “Public Health Insurance, Labor Supply, and Employment Lock,” National Bureau of Economic Research, NBER Working Paper 19220, July 2013, http://www.nber.org/papers/w19220.

[67] Chris Jacobs, “Putting Obamacare in a Deep Freeze,” National Review December 7, 2016, http://www.nationalreview.com/article/442820/obamacare-repeal-replace-enrollment-freeze-first-step.

[68] Kim Palmer, “Ohio Lawmakers Vote to Freeze Medicaid Expansion,” Reuters June 28, 2017, https://www.reuters.com/article/us-ohio-budget/ohio-lawmakers-vote-to-freeze-medicaid-expansion-idUSKBN19K0B8; Caleb Taylor, “House Passes Medicaid Expansion Freeze,” The Arkansas Project March 1, 2017, http://www.thearkansasproject.com/house-passes-medicaid-expansion-freeze/.

[69] Foundation for Government Accountability, “Freezing Medicaid Expansion Enrollment Will Save Taxpayers More Than Half a Trillion,” February 2017, https://thefga.org/wp-content/uploads/2017/02/MedEx-Freeze-Savings-Table.pdf.

[70] Letter by Health and Human Services Secretary Tom Price and Centers for Medicare and Medicaid Services Administrator Seema Verma to state governors regarding Medicaid reform, March 14, 2017, https://www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf.

[71] See for instance Chris Jacobs, “Reforming Medicaid to Serve Wyoming Better,” Wyoming Liberty Group Wyoming Policy Review Issue 101, June 2017, https://wyliberty.org/images/PDFs/Wyoming_Policy_Review-Jacobs-Reforming_Medicaid-101.pdf, and Naomi Lopez Bauman and Lindsay Boyd, “Medicaid Waiver Toolkit,” State Policy Network, August 2017.

[72] 42 U.S.C. 1396u-8, as codified by Section 6082 of the Deficit Reduction Act of 2005, P.L. 109-171; Section 613 of the Children’s Health Insurance Program Reauthorization Act of 2009, P.L. 111-3; Josh Archambault and Nic Horton, “Right to Shop: The Next Big Thing in Health Care,” Forbes August 5, 2016, http://www.forbes.com/sites/theapothecary/2016/08/05/right-to-shop-the-next-big-thing-in-health-care/#6f0ebcd91f75.

[73] Steven Burd, “How Safeway is Cutting Health Care Costs,” Wall Street Journal June 12, 2009, http://www.wsj.com/articles/SB124476804026308603.

[74] Louisiana currently ranks fifth in the nation for adult obesity, with an obesity rate of 35.5%. See Trust for America’s Health, “The State of Obesity,” https://stateofobesity.org/states/la/.

[75] 42 U.S.C. 1397ee(c)(10)(B)(ii)(II) and 42 U.S.C. 1396e-1(b)(2)(B), as codified by Section 301 of CHIPRA.

[76] See for instance testimony of Patti Killingsworth, TennCare Chief of Long-Term Supports and Services, before the Commission on Long-Term Care on “What Would Strengthen Medicaid LTSS?” August 1, 2013, http://ltccommission.org/ltccommission/wp-content/uploads/2013/12/Patti-Killingsworth-Testimony.pdf. The author served as a member of the Commission.

[77] Mattie Quinn, “On Medicaid, States Won’t Take Feds’ No for an Answer,” Governing October 11, 2016, http://www.governing.com/topics/health-human-services/gov-medicaid-waivers-arizona-ohio-cms.html.

[78] Centers for Medicare and Medicaid Services, “Opportunities to Promote Work and Community Engagement Among Medicaid Beneficiaries,” State Medicaid Director letter SMD-18-002, January 11, 2018, https://www.medicaid.gov/federal-policy-guidance/downloads/smd18002.pdf

[79] Louisiana Office of the Attorney General, “Over $2 Million in Medicaid Fraud Uncovered in New Orleans,” October 16, 2017, https://www.ag.state.la.us/Article/3470/5.

[80] Jonathan Ingram, “Stop the Scam: How to Prevent Welfare Fraud in Your State,” Foundation for Government Accountability, April 2, 2015, https://thefga.org/wp-content/uploads/2015/04/Stop-The-Scam-research-paper.pdf.

[81] See for instance Government Accountability Office, “Medicaid: Additional Federal Action Needed to Further Improve Third Party Liability Efforts,” GAO Report GAO-15-208, January 2015, http://gao.gov/assets/670/668134.pdf.

[82] Testimony of Gary Alexander, former Rhode Island Secretary of Health and Human Services, on “Strengthening Medicaid Long-Term Supports and Services” before the Commission on Long Term Care, August 1, 2013, http://ltccommission.org/ltccommission/wp-content/uploads/2013/12/Garo-Alexander.pdf.

[83] Lewin Group, “An Independent Evaluation of Rhode Island’s Global Waiver,” December 6, 2011, http://www.ohhs.ri.gov/documents/documents11/Lewin_report_12_6_11.pdf.