ObamaCare's Medicaid Expansion Is Also a Problem

When it comes to ObamaCare, the law's health insurance mandate is the bigger political and legal story. But the Medicaid expansion, which accounts for roughly half of the law's increase in insurance coverage, is arguably the bigger policy story. Medicaid, however, is a deeply troubled program. Like many state-run health programs, it suffers from numerous cost problems. Yet its health benefits remain unclear. On an array of specific maladies, multiple studies report that beneficiaries with diseases such as colon cancer, breast cancer, and melanoma actually fare slightly worse on average than those with no insurance at all. A high-quality study of Medicaid recipients in Oregon found that self-reported health status rose after individuals were enrolled in Medicaid, but that two thirds of the effect occurred before the enrollees has received any medical care. 

The news about Medicaid is not getting any better. A new study by researchers at the University of Colorado, meanwhile, indicates that Medicaid enrollees face greater barriers to care, and confirms that they use emergency care at far higher rates than other patients. Another recent study conducted by the Center for Studying Health System Change also indicates that the Children's Health Insurance Program (CHIP), a Medicaid spinoff program focused on kids, does significantly not improve physician access. "Coverage expansions," reports author Chapin White," even if they substantially reduce patient cost sharing, do not necessarily increase physician utilization." What does improve access? Paying doctors more: "Increases in physician fees," the study notes, "are associated with broad-based improvements in indicators of access." That's not likely to be comforting to the 16 million Americans who will end up on the program as a result of ObamaCare: Medicaid boasts the lowest provider reimbursement rates of any health program. 

The states challenging the health law's mandate are also challenging the Medicaid expansion. Most observers believe the constitutional case against the Medicaid portion of the law isn't as strong as the one against the mandate. But for the millions of Americans shuffled into a failing program because of the law, the Medicaid expansion will likely have a bigger impact.