Are Republican Governors Who Choose To Accept Medicaid Expansion Helping Or Hurting Their State?

 Due to the passage of the Affordable Care Act, also known as Obamacare, a decision to accept federal funding for Medicaid expansion has to be made by mid-year 2013. This is done so that facilities needed to accommodate the 33-38% increase in Medicaid enrollment can be operational by early 2014. Several of the Republican Governors have also opted to utilize health insurance exchanges. As of the end of February 2013, there are 8 states with Republican Governors accepting Medicaid expansion.They are Ohio, Michigan, New Mexico, Nevada, Arizona, Florida, New Jersey and North Dakota. All these states except for North Dakota and Arizona were carried by Obama in 2012. Therefore, it appears that these Governors are caving in on this Medicaid expansion in order to help their political aspirations in the short-term.

The federal government is promising to pay 100% of the expenses of newly eligible Medicaid beneficiaries for 3 years and then 90% in the fourth year. So, the Governors are justifying this decision to accept Medicaid expansion because of increased inflow of federal tax money into the state. In the short term, this could make sense if Medicaid spending was run efficiently and was effective in improving quality care. But as we know, this is not the case. For hospitals and physicians, there is a financial loss when caring for Medicaid patients. Medicaid cost per person has risen way over their projections for more than 3 decades. Therefore, to increase a program that is ineffective and costly and not improving quality care just doesn't make any sense.

I believe that the Governors are also caving to special interest groups such as those that benefit from increasing the Medicaid amount provided to the state from the federal government. These special interest groups include the state bureaucracy, suppliers of medical equipment and those in healthcare who actually benefit from accepting Medicaid. The other special self-interest is a better chance for this particular governor to be reelected. I believe this to be a selfish motive and one that may benefit that particular politician but does not benefit the best interests of the citizens of his or her state.

Obamacare is a very poor piece of legislation.  The stated goals of curbing the increasing costs of healthcare and insuring more Americans will not be achieved. As we know, the costs are going up by about 10% a year which is much higher than predicted or expected. Also, because the mandate portion of Obamacare was upheld by the Supreme Court last summer, many citizens who chose not to have or purchase health care in the past are now forced to do so. These citizens now forced or mandated to have health insurance may increase the number of insured Americans in healthcare by several millions, but they will be offset by many more Americans who will lose healthcare coverage because of increasing unemployment and an employer’s inability to cover their employees because of the increased costs and increased regulations.

Since the stated goals of Obamacare will not be achieved; what can we actually expect to result from implementing Obamacare? We can expect that Obamacare along with its many taxes, regulations, penalties, Medicaid expansion and Health Insurance Exchanges will result in a bankrupting of our healthcare system (both financially and with respect to quality of care). The real purpose of Obamacare was to lead to the destruction of the private sector component of healthcare in this country. By doing so, a single payer Government controlled system results by default. Government programs always tend to be more costly and less efficient than a private market system and one where there is freedom of choice. These Governors, by accepting Medicaid expansion, have chosen to abandon the principles that make healthcare in this country better than all other countries. They have also abandoned the principles of smaller government and a government that has less control over its citizens.

On the next blog, some of the solutions will be discussed such as health savings accounts and a free market based system.