Not Everyone Benefits From Medicaid Expansion
~ Originally published in the Portland Press Herald in October, 2017
Aug 19, 2018
Several recent editorials praise this November’s ballot initiative to extend Medicaid (MaineCare) benefits to working-age, non-disabled, childless adults earning up to 138% of the federal poverty level (FPL). Writers foresee better access to healthcare, lives saved, and an economic boom resulting from increased hospital jobs. However, expansion will not benefit everyone. It will hurt some it purports to help.
It is true a substantial number of Mainers have no health insurance, or “coverage.” This does not mean they have no access to healthcare. Coverage is not the same thing as healthcare. Maine is home to 150 Federally Qualified Health Centers; doctors’ offices that receive federal funds to treat uninsured people below the FPL at no cost and offer very low cost care to patients under 200% of FPL. Maine law also requires hospitals to provide care at no cost to individuals below 150% of FPL. While not perfect solutions, these and other programs already exist to provide healthcare (rather than coverage) to those MaineCare expansion would cover.
In addition, many who fall within the proposed expansion criteria already qualify for federal subsidies to purchase private insurance through the Affordable Care Act. A person making $16,000 a year can buy a silver plan with a broad provider network and $200 annual deductible for $40 per month – less than the cost of a cell phone bill. If MaineCare is expanded, these individuals will no longer qualify for subsidies and will lose their private insurance. They will have MaineCare. Low income employees with employer-based insurance may enroll in MaineCare to avoid paying premiums and some employers may drop coverage for employees who qualify for MaineCare.
You may ask what difference it makes whether patients have private insurance or MaineCare. It makes all the difference.
Fewer primary care doctors accept MaineCare than accept private insurance. This often means longer drives and longer waits to be seen. Understandably, some turn to the emergency room – the most expensive avenue to treatment – for primary care. Not only does this divert resources from true emergencies, it also means that instead of a $100 doctor’s bill being sent to an insurance company, a $1,500 ER bill is sent to Augusta.
Fewer doctors accept MaineCare because MaineCare only reimburses providers about 75 cents of each dollar in cost to treat a patient. To borrow a phrase from the minimum wage debate, MaineCare does not provide a “living wage.” A card in your pocket is worthless if the doctor doesn’t accept it.
On the other hand, private insurance reimburses providers at rates that make up for MaineCare’s low payments. A critical mass of privately insured patients is vital to the continued financial viability of our hospitals, nursing homes and other care facilities. As privately insured patients are shifted to MaineCare, providers are paid less for the same service. Although MaineCare expansion would take some patients from paying zero to paying something, it will also take many living wage patients and make them unsustainable. A hospital that closes can’t treat anyone.
Expansion proponents claim a reduction in uncompensated care will outweigh reduced payments from other patients. On the point of uncompensated care, I can’t help but recall that MaineCare proved to be just that for several years the last time we expanded the program. The state could not afford to make payments to providers and hospitals were stuck with hundreds of millions of dollars in unpaid bills. That MaineCare expansion didn’t lead to a boom in hospital jobs. It led to layoffs.
Even if the federal government pays 90% of the cost of expansion, 10% of a big number is still a big number. Estimates show expansion will add $100 million annually to the budget within a few years. The government just shut-down over a smaller amount, and expenditures in other states that recently expanded Medicaid quickly exceeded projections; just as they did in Maine the last time we expanded MaineCare. Once implemented, the legislature cannot control MaineCare costs. People go to the doctor and the bill goes to the state, which is obligated to pay. Increased pressure on the budget jeopardizes the state’s progress over the past few years to increase services to the disabled, the elderly, impoverished children and pregnant Mainers.
At first blush expanding MaineCare may sound attractive, but please consider that it will not be without substantial costs: both financial and human.
John H. Doyle is an attorney, farmer and father of five young children. A graduate of the College of William and Mary and the University of Virginia School of Law, John launched his legal career in the corporate and securities group of a large law firm in Washington, DC, before starting his own practice representing technology companies as in-house counsel. Along the way John married his high school sweetheart, Joan, who brought him back to Maine; the place her family has called home since before the Revolutionary War. John, Joan and their children now carry on the tradition of farming at the historic family homestead.