Buyer beware: Five things to know about Haslam's Medicaid expansion


February 2, 2015 1:09PM
This piece originally ran in the Chattanooga Times Free Press. On Feb. 2, the 109th Tennessee General Assembly will gather for a special session to determine the fate of Gov. Bill Haslam’s proposed expansion of Medicaid under Obamacare. Tennessee taxpayers did their part last year, pushing lawmakers to pass the “Stop Obamacare Act,” requiring the governor to seek legislative approval before unilaterally implementing an expansion of the government health insurance program. Of course, the governor would have Tennesseans believe we can have our cake and eat it too — take federal expansion dollars, but spend them how we see fit. The problem is that’s not how it works when you wheel and deal with Washington bureaucrats. Here are the top five things Tennesseans should know about “Insure Tennessee”: 1. These are not “free” federal dollars that another state’s taxpayers receive if Tennessee fails to claim “our share.” There is no pot of Medicaid money sitting in Washington waiting for us to grab. Every dollar used to finance a state Medicaid expansion is a dollar borrowed from other countries and charged to our national credit card. And who will be left paying the bill? Our children and grandchildren, with interest. 2. Estimates indicate that between 200,000 and 400,000 Tennesseans will be eligible for this expansion. And the vast majority of them are able-bodied, childless adults of working age. With 40 percent of Tennessee doctors now refusing to see new Medicaid patients, these folks will add to the plight of our state’s most vulnerable, who are already enrolled in the program and struggle to find a physician to treat them. Expect the added strain on the program to cause long lines with heartbreaking unintended consequences for those who are truly disabled or otherwise unable to help themselves. 3. The “Volunteer Plan” or voucher for those who qualify to purchase employer coverage is exactly that — an incentive for employers to drop their share of insurance costs down to 50 percent so that taxpayers can “volunteer” to pay the rest. Not only is this bad policy, but it’s a misleading talking point. The Foundation for Government Accountability estimates that just 16 percent of new Medicaid enrollees are working full time, while many of those working part time are not eligible for their employer’s health plan. They will instead be dumped onto the traditional Medicaid rolls.. 4. Hospitals claim they will pick up the bill for any state costs over the two-year pilot program, but what happens when costs exceed projections? (Ask Arkansas, Illinois, Utah.) Hospitals claim they need expansion money to survive, but with Medicaid reimbursements decreasing, putting thousands more onto the program only kicks an empty can down the road. Plus, the funding scheme used to obtain the federal dollars is sketchy at best. Hospitals front the state money through an “assessment fee,” and the state turns around and shows the feds that it has its share of the pie in order to secure more taxpayer money from Washington. In the end, the hospitals get their money back, plus billions more from taxpayers. Our own two U.S. senators have called for ending this funding mechanism in the past, yet it is the primary means for funding the proposed Medicaid expansion. If the assessment fee comes under attack from Congress, state taxpayers will have no choice but to step in and pick up the tab. 5. It is easier to ask for forgiveness than permission. At least that’s what Governor Haslam is likely hoping. Once the pilot program expires, he will need reauthorization from Washington, but if the program fails to deliver, will legislators have political license to kick more than 200,000 people off health care? And even if they do, is it right to give someone a “free” rug only to rip it out from under them? Ultimately, legislators must decide if we burden more Tennesseans with Obamacare’s broken promises, failed schemes, and unsustainable policies, or whether we march towards more freedom, greater access, and better care. Taxpayers will be watching.   Lindsay Boyd is the director of policy at the Beacon Center of Tennessee, the state’s premier free market think tank. Learn more at