ARKANSAS MEDICAID EXPANSION NO MODEL

December 17, 2014

As part of their push for ObamaCare’s Medicaid expansion, the Charlotte Observer likes to talk about all the money from Washington we’re missing out on if we don’t put another half a million people on Medicaid.

That’s like the salesman saying he can get you a rebate if you buy the new car. For ObamaCare’s Medicaid expansion, North Carolina still has to divert $3 billion from our revenues needed for education, job training or the elderly and disabled already on Medicaid. And the $3 billion will be going for hundreds of thousands of working age, able bodied adults who don’t work.

The Charlotte Observer noted Arkansas obtained a waiver from the Obama Administration allowing them to use Medicaid expansion money to buy private health insurance for Medicaid expansion beneficiaries, something called the private option.

Is that where North Carolina should go on Medicaid expansion? Not unless we’re looking for more Medicaid cost overruns to go with the billion dollars of cost overruns in the last few years.

Let’s review what The Oklahoman reported about the Arkansas private option for ObamaCare Medicaid expansion. “WHILE Oklahoma and some other states have rejected Medicaid expansion under Obamacare, officials in neighboring Arkansas took a different approach. Instead of direct expansion of Medicaid, they got a federal waiver and used Medicaid expansion funds to help low-income citizens buy private insurance through Obamacare exchanges.

The Arkansas model was touted as a free-market alternative to straight Medicaid expansion that would better control costs. It hasn’t worked out that way, and Arkansas taxpayers will foot the bill.”

The newspaper explained the waiver requires the state to eat cost overruns on the big Medicaid entitlement expansion. “As things stand, Arkansas has already spent $7.7 million more than allowed under the caps. Cost overruns could run as high as $45 million per year. Arkansas taxpayers will have to make up the difference if costs aren’t reined in before the end of the three-year waiver.

When that time comes, Arkansas officials will have to divert millions of state tax dollars from other needs, such as schools, roads and public safety. This is the same problem associated with traditional Medicaid expansion. One study estimated traditional Medicaid expansion would require increased state spending of $850 million over 10 years in Oklahoma.”

If North Carolina experienced the same private option Medicaid expansion problems Arkansas has, we would have a $100 million budget buster on our given our bigger population.

As The Oklahoman said ”While the Arkansas model was touted as a market-based alternative, its actual content involved few true free-market incentives. The program merely used taxpayer dollars to buy insurance.

Under the waiver agreement, private-option enrollees can’t be required to pay any part of their premium out of pocket. Nor can they be required to pay deductibles out of pocket. Some co-payments are allowed, but they’re strictly limited and may total only a few dollars. The Urban Institute estimated roughly 77 percent of private-option enrollees would have no cost-sharing at all. This virtually ensures that recipients won’t be cost-conscious with their health care spending.”

North Carolina Medicaid already covers elderly people, blind and disabled people who can’t help themselves and children and parents. Medicaid already costs taxpayers $14 billion. There’s no need to add able bodied, working age adults who don’t work to the rolls.

The Governor and Legislature are under the gun to pass ObamaCare Medicaid expansion using some kind of private option. The special interests feeding off Medicaid, the media and left are united for a larger Medicaid program.

The Governor and Legislature have restored fiscal responsibility, improved the tax climate for business and now our economy is creating jobs faster than the nation. Their $3300 average raise for teachers was a serious first step to attract and reward good teachers.

Medicaid expansion under ObamaCare can blow up the budget. Just say no.