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Illinois Should Not Expand Its Medicaid Industrial Complex

Illinois, like other states, is considering expanding its Medicaid program as envisioned under Obamacare. Doing so takes money that America doesn't have to provide bad health insurance to young, healthy people who don't need it, for the benefit of the people with the best lobbyists.

The Medicaid expansion has now passed both chambers of the Illinois General Assembly, but the House made several amendments that the Senate must now approve. There is still a chance that wisdom could prevail over the false appearance of helping people. 

Medicaid itself is an expensive program that doesn't appear to help its recipients. According to Avik Roy of the Manhattan Institute, if Medicaid were a drug, "zero" doctors would prescribe it.

Medicaid patients tend to use Emergency Room services for everything they can, because ER visits are covered without co-pay under the program. Obamacare was sold as a way to get people out of the ER and into more efficient clinics, but with Medicaid expansion the effect will be just the opposite.

Medicaid expansion does appear to help hospitals, as part of what Heritage analyst Ed Haislmaier calls the "medical industrial complex". One district aide said most of the calls she had received on the issue were from staff from the local hospitals calling to support it. In many areas, hospitals are the largest employer, deriving about half of their income from government payments.

Where does the Medicaid money come from? Straight from the federal deficit. The projected 10-year cost of Medicaid expansion in the Affordable Care Act was $800 billion, but with so many states wisely not expanding their programs, the new cost is only $289 billion, a "savings" of $511 over the course of a decade.

States Saving on Medicaid

Some of those "savings" over projected spending will disappear if Illinois chooses to waste money on this awful program.

Jonathan Ingram, senior fellow in health policy at the Ilinois Policy Institute, explained in an excellent analysis why Senate Bill 26 "not right for Illinois."  

  1. No one is forcing the state to expand its Medicaid program, and most states are not
  2. We don't know how much it will cost 
  3. The bill moves people from private insurance to Medicaid
  4. The federal government is unlikely to fulfill its commitment
  5. The "trigger" to pull back the expansion is unlikely to work

Ingram added,

SB 26 would dump hundreds of thousands of able-bodied, childless adults into a program that isn't working, crowding out resources for those most vulnerable who are currently on Medicaid. This means that resources for children, the elderly and the disabled will instead be spent largely on young, able-bodied adults without children.

Illinois has spent the Blagojevich-Quinn years spending all it can, with little to show for it but a credit rating that serves as a punch line.  The state is foolish to continue to waste money on Medicaid, especially since the program doesn't really even help the poor. It's another example of politicians spending the people's money to make themselves look good, while not doing a thing to help those most in need.