Medicaid expansion wrong for Maine
Now that the legislative session is over, it is time for all of us to turn our attention to the latest attempt by special interest groups to go around the legislative process to pass a major law with far-reaching implications by placing a vaguely worded question on the ballot, supported by millions of dollars in special-interest money with little organized opposition.
I’m speaking, of course, of the upcoming referendum on Medicaid expansion.
This referendum is just as destructive and unwise as those you saw on last November’s ballot.
Medicaid expansion would represent a return to past mistakes in state government, and would permanently harm Maine’s fiscal health, for not much benefit.
Of course, that isn’t what the special interest proponents of the ballot question will tell you. To hear them tell it, Medicaid expansion is a magical proposal that will save the state money, cause a huge economic boom in Maine, stop thousands of people from dying in the streets and solve the opioid crisis, all at the same time.
Don’t fall for it, because it isn’t true.
Medicaid was created in 1965, and was part of the now famous “War on Poverty” initiative sponsored by President Lyndon Johnson. The logic behind the program was simple: provide medical and health-related services to vulnerable populations.
Historically, Medicaid eligibility has been limited to low-income children, pregnant women, parents of dependent children, the elderly and those with disabilities.
With the institution of the Affordable Care Act, however, states were pushed hard to expand their Medicaid populations to nonelderly childless adults earning up to 138 percent of the federal poverty line.
But these Obamacare extensions were not the first experiment with expansion.
In 2002, under Gov. Angus King, Maine expanded Medicaid eligibility to childless adults earning less than 125 percent of the federal poverty line.
When that expansion occurred, you heard many arguments that are very similar to the ones you will be exposed to on your television sets this fall. They weren’t true then, and they aren’t true now.
For instance, proponents claim that expansion will lead to explosive growth in the economy. However, there is no evidence that Medicaid expansion improved Maine’s economy the last time we experimented with the idea.
In fact, GDP growth in the years following the 2002 Medicaid expansion was substantially slower than during the previous years. In addition, the poverty rate, which had hovered around 10.5 percent from 2000 to 2002, surged to nearly 13 percent in 2006.
Then, there is the idea that expansion will help drive down the uninsured rate. Alas, this too is untrue.
After our previous expansion, the uninsured rate among nonelderly adults in Maine remained remarkably stable. This was mostly due to a phenomenon called “crowd-out.” This occurs when public health insurance programs are expanded and those who previously had private health insurance opt to enroll in the government program instead of continuing to personally finance their health insurance.
In the aftermath of Medicaid expansion in Maine in 2002, the crowd-out effect resulted in virtually no long-term change in the uninsured rate. Instead, the share of Mainers with employer-sponsored health insurance fell from 70 percent to 61 percent while the share of the population on Medicaid grew from 14 percent to 25 percent.
And then there is the ever-popular argument that claims Medicaid expansion will save lives.
A 2012 study published in the highly respected New England Journal of Medicine failed to detect a statistically significant reduction in Maine’s mortality rates in the aftermath of Medicaid expansion in 2002, compared to New Hampshire, which did not expand its Medicaid program at that time.
The results are no different in states that have expanded since 2014. Indeed, an analysis of data from the Centers for Disease Control and Prevention states that expanded Medicaid in 2014 saw mortality increase by nine per 100,000 in 2015 while nonexpansion states saw an increase of only six per 100,000.
In other words, it has no real effect.
And then, the icing on the cake is the gargantuan cost with which this idea will burden the Maine taxpayer.
According to an analysis conducted by the organization that I lead, the Maine Heritage Policy Center, and due to be released later this month, the direct costs to Maine taxpayers would be virtually unbearable.
Over the next five fiscal years, state spending on Medicaid would total nearly $400 million, reaching $100 million in 2022 alone and increasing steadily in subsequent years as medical inflation outstrips the rate of personal income growth.
Expensive and ineffective. That’s Medicaid expansion in a nutshell. It must be opposed.
Matthew Gagnon of Yarmouth is the chief executive officer of the Maine Heritage Policy Center, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.