Is Medicaid Expansion Affordable?

And even it was affordable, is it best to give something for nothing?

By Scott Sales

Over the next few months Montanans will debate Medicaid expansion in the Legislature and the press. When proponents speak about Medicaid expansion, you can be confident that the cost will not be part of the conversation and you will hear how foolish it would be to require work as a condition of receiving health care. To clarify, this debate is not about vulnerable populations as they are covered under Medicaid. Medicaid was designed in the 1960s for the mentally ill, disabled, pregnant women, children and impoverished seniors. Medicaid expansion provides healthcare coverage for able-bodied individuals under 138 percent of the poverty level ($17,236 for one and $35,535 for a family of four). Unlike traditional Medicaid it requires no assets test or disability to qualify and is provided free or nearly free. Since its start in 2015 costs have exploded and the 21-biennium cost is an estimated $1.5 billion. With 96,000 enrolled the cost to the state is $7,800 per person while the cost nationally is  about $6,500 per person.

Proponents argue that the state “only” pays $126 million and the federal government the rest. But can the federal government afford this? The short answer is no. The U.S. government has a current budget of $4.4 trillion and is running a deficit of $850 billion per year and rising. Current debt stands at $22 trillion and unfunded pension and entitlement liabilities are $122 trillion. According to the Centers for Medicare and Medicaid Services 2017 Medicaid Actuarial report, Medicaid expansion costs were expected to be $70 billion in 2017 and hit $120 billion by 2026, adding nearly $1 trillion to federal deficits over the next 10 years.

The argument that the cost is “only” $126 million to Montana taxpayers is disingenuous. Montana taxpayers are also federal taxpayers and Americans have a clear stake in the consequences of federal deficits.

In the United States, there are 13 federal and state programs costing nearly $350 billion annually, not counting Medicaid or expansion. It is estimated that the U.S. spends nearly $18,000 per person or $72,000 for a family of four for poverty programs. And what is the result? Since the institution of the “war on poverty” in the 1960s, we have spent trillions of dollars and poverty has not budged but stubbornly stayed between 12 and 15 percent.

Federal candidates now say we need to do more and are promoting “free” college tuition and a Universal Basic Income (UBI) among other grand schemes with no work requirement. In other words, it’s not enough to have free health care, child care, transportation, phones, food and energy. Clearly these are socialist agendas that fundamentally change the basic American ethic that you should work for what you receive.

And even it was affordable, is it best to give something for nothing? Current legislative debates rage over if we should require work or even anything as a condition to receiving health care. The great fear is that if we expect people to get a job to receive their benefits, we might force 34,000 unemployed off the expansion roles. A generation ago families worked to ensure they had housing, food, transportation and healthcare. Today work disqualifies you for benefits and there is a strong disincentive to be productive.

We are creating a society where there is no incentive to work and produce for our basic needs. Under Medicaid expansion there is a strong incentive not to work or work less. In fact, if you are at 138 percent of poverty a $1,000 raise could easily cost the loss of $10 -$15,000 in benefits. Why work when you have the state providing?

Scott Sales, R-Bozeman, is the president of the Montana state senate.