04/17/2017

Sally C. Pipes: Is Obamacare’s Survival Really A Victory For The Nation’s Poor?

Sally C. Pipes, The Virginian Pilot

Is Obamacare's survival as of now a victory for the nation's poor?

That's what the law's supporters would have people believe. Democrats -- and more than a few Republicans -- maintain that House Speaker Paul Ryan's decision to withdraw the American Health Care Act on March 24 has saved millions from losing coverage through Medicaid, the joint federal-state health insurance program for low-income people.

In the wake of AHCA's failure, leaders in several of the 19 states that originally rejected Obamacare's Medicaid expansion are now trying to adopt the reform. Although that effort failed in both Kansas and Virginia the perception that Medicaid is a gift to low-income patients remains popular.

Reality tells a different story. Medicaid is failing. Thanks largely to Obamacare's expansion of the program, Medicaid accounts for an unsustainable share of federal and state spending -- even as it fails to improve the health of the patients it purports to serve. Spending grew to roughly $554 billion in 2015, or more than 3 percent of the gross domestic product.

Only in government would the survival of a program that costs ever more to run -- and delivers little to no benefit -- be celebrated. Republicans must renew their efforts to replace Medicaid's open-ended federal funding commitment with a series of fixed payments to the states in order to put the program back on a fiscally sound path that works for patients -- and demand accountability from its administrators.

Obamacare swelled Medicaid's rolls to over 74 million. The federal government pays 100 percent of the funding for expansion enrollees through the end of next year, and will pick up 90 percent of the tab until the end of 2020.

But research has long raised doubts about how much good the program actually does for patients. A two-year study in Oregon, for instance, found that Medicaid conferred "no significant improvements" in health outcomes compared to those who had no coverage at all.

Another new study in the New England Journal of Medicine found that Medicaid expansion in 29 states and the District of Columbia had no effect on the actual health of low-income patients.

Obamacare's Medicaid expansion did succeed in hiking the costs of an already unsustainable program. A report compiled by the Obama administration estimates the program's costs will exceed $975 billion by 2025.

There's no guarantee that the money will be spent wisely. Fraud, waste, unnecessary procedures, and other "improper payments" accounted for more than 10 percent of federal Medicaid spending in 2016, or $36 billion, according to the Government Accountability Office.

So Medicaid fails to meet the healthcare needs of the poor -- and does so at great cost to taxpayers.

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