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.

The Inconvenient Truths of Louisiana’s Medicaid Expansion

In the wake of a wave of stories about the tens of thousands of ineligible individuals who received Medicaid benefits, supporters keep trying to defend Louisiana’s expansion of Medicaid to the able-bodied. But their defenses ignore several inconvenient truths.

First, money doesn’t grow on trees. Health Secretary Rebekah Gee recently claimed that Louisiana’s “Medicaid expansion comes at no additional cost to taxpayers.” Because she believes the federal government will pay all the cost of Medicaid expansion, she thinks Louisiana taxpayers are “off the hook” for the program’s spending. But anyone who had to mail a check to the Internal Revenue Service on April 15 would disagree. By definition, any new government spending imposes a cost to taxpayers, because Louisiana residents pay taxes to Washington just like everyone else.

And Louisiana has seen a ton of new government spending due to Medicaid expansion. In 2015, the Legislative Fiscal Office projected spending on expansion to total $1.2 billion-$1.4 billion per year. In the last fiscal year, Louisiana spent nearly $3.1 billion on expansion—or more than double the Fiscal Office’s original estimates.

Second, the truly vulnerable continue to get overlooked due to Medicaid expansion. Secretary Gee claimed that her “top priority is to ensure every dollar spent [on Medicaid] goes towards providing health care to people who need it most.” But Louisiana still has tens of thousands of individuals with disabilities on waiting lists for home and community-based services—who are not getting the care they need, because Louisiana has focused on expanding Medicaid to the able-bodied.

Since Louisiana expanded Medicaid in July 2016, at least 5,534 Louisiana residents with disabilities have died—yes, died—while on waiting lists for Medicaid to care for their personal needs. Louisiana should have placed the needs of these vulnerable patients ahead of expanding coverage to able-bodied adults—tens of thousands of whom already had private health insurance and dropped that insurance to enroll in Medicaid expansion.

This skewed sense of priorities pervades supporters of Medicaid expansion. One recently claimed that most of the individuals improperly enrolled in expansion “are poor, but not poor enough to qualify for coverage” under Medicaid.

The Louisiana Legislative Auditor’s report suggests otherwise. The 100 Medicaid recipients studied by the auditor, 93 of whom did not qualify for benefits for at least one month they received them, had an average—repeat, average—household income of $67,742. Fourteen of the recipients reported income of over $100,000. One recipient reported income of $145,146—well above Governor John Bel Edwards’ annual salary of $130,000.

The Louisiana Department of Health recently acknowledged that at least 1,672 individuals receiving over $100,000 qualified for Medicaid benefits. Supporters of Medicaid expansion can claim that these six-figure Medicaid beneficiaries classify as “poor,” but hardworking taxpayers forced to foot the bill for these recipients would likely disagree.

Louisiana taxpayers deserve policies that prioritize the most vulnerable in society—individuals with disabilities currently dying on waiting lists—rather than funding benefits for enrollees with six-figure incomes, or able-bodied adults who dropped their private coverage to enroll in Medicaid. They deserve more than claims that money grows on trees, or that expanding dependency will lead to growth and prosperity. They deserve better than Medicaid expansion’s failed status quo.

This post was originally published in the Daily Advertiser.