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Blog

    Medicaid Expansion: Making The Problem Worse

    01/03/2014

    Obamacare is struggling to survive its encounter with the real world. We were promised it would decrease the number of uninsured, lower health insurance prices, allow consumers to keep their policies and doctors, reduce Emergency Room usage, or reduce costs with preventive care.  None of those promises were ever true, and now they're being proven such. Even the expansion of the Medicaid program is proving counterproductive. All of that points to a simple truth.

    You can't legislate reality.

    Medicaid Recipients Crowd Emergency Rooms

    Obamacare was sold based on the "free rider" problem, with -- so the story went -- throngs of uninsured sitting around emergency rooms to see the doctor because they couldn't get care.  That was never the case.

    The latest study from MIT confirms what we have known for decades: people on Medicaid tend to use the ER more, not less, than the uninsured do. That is a consequence of the program, not the people on it, who are merely responding rationally to the program's incentives.

    Medicaid pays almost all of the cost of emergency room visits, but not as much to visit a primary care doctor. As a result, fewer doctors see Medicaid patients (at least without a wait for non-urgent care), and the mostly-free ER visit is all the more attractive.

    As early as 1983, the Department of Health and Human Services Inspector General reported "a very high misuse of hospital emergency rooms by Medicaid recipients." A decade later, the IG said "Over one-half to two-thirds of Medicaid emergency room visits are non-emergency."

    In 2007, a National Center for Health Statistics report showed Medicaid doubling Emergency Room use, while people with traditional insurance and the uninsured used the ER at about the same rate. Medicaid recipients were more likely to have had multiple ER visits, and the uninsured were not. The uninsured were also no more likely to have an ER visit classified as nonurgent. The trend continues, so we can call it conclusive: Medicaid encourages people to use the emergency room more than if they were uninsured. Reality interferes with Obamacare, once again.
    The Prevention Myth

    Obamacare proponents often say that preventive care saves money. It rarely does. The likelihood of contracting an ailment without prevention, the effectiveness and cost of prevention (including side effects), the severity of the ailment (including contagion), and the effectiveness and cost of the cure have to all line up just right for prevention to beat remediation. While we obviously prefer that no one gets sick in the first place, and may undertake prevention because of that, it usually doesn't mean saving money. 

    Legislating Reality

    Laws should flow from widespread public consensus, not from efforts to try to create that consensus.  We often hear that "You can't legislate morality," but that just means laws don't make people moral. Many of our laws are notions of right and wrong behavior enforced by government.

    Obamacare is an effort, on one hand, to legislate morality in the negative sense, to try to create morality where it is not shared by all. Its proponents see access to health care in moral terms, and increasing insurance coverage as a way to increase access to health care. Even though many people agree with the need for increased coverage, the public has never been fully on board with the solution.

    As we have seen, the rest of the problem is that Obamacare doesn't work. Its assumptions don't fit reality, and despite the hopes of its proponents, reality won't change to fit the law.