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Don’t Buy the Hype: Medicaid Expansion Would Be a Disaster for Idaho

September 19, 2018

In this Policy Brief, Heartland's Charlie Katebi and Lindsay Atkinson from the Idaho Freedom Foundation discuss how Milliman and other consulting firms routinely underestimate the cost of Obamacare's Medicaid expansion.

On July 24, 2018, liberal activists announced they collected enough signatures to place Medicaid expansion on Idaho’s November 2018 ballot. If voters approve this initiative, Idaho will expand the program to able-bodied adults that earn up to 138 percent of the federal poverty line.

Supporters of Medicaid expansion claim the program will generate millions of dollars in new revenue and save money, citing a recent report from the consulting firm Milliman. However, an earlier 2016 report from Milliman determined Medicaid expansion would cost Idaho almost $3 billion more than its new estimates. The firm argues its 2018 estimates are more accurate because Medicaid expansion has cost other states less than previously thought, but this claim is completely without merit.

The best-available evidence shows Medicaid expansion has cost taxpayers far more than the predictions made by numerous analysts, including Milliman. In fact, states have enrolled nearly twice as many individuals as forecasters initially predicted. In response to these increasing costs, states have been forced to divert funding away from essential public services, including schools, law enforcement, and transportation.

The cost of Medicaid expansion has imposed crushing burdens on taxpayers and residents, and it often harms the program’s newly eligible able-bodied recipients, because Medicaid’s benefits phase out as an individual’s income rises. That means the program incentivizes recipients to stay in poverty or even drop out of the labor force entirely.

At a time when Idaho’s growing economy is generating increasingly more revenue and creating a record number of jobs, many of which provide employer-sponsored health insurance, lawmakers shouldn’t squander these gains by gambling on Medicaid expansion.

Author
Charles Katebi is state government relations manager with the Heartland Institute
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