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.

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.