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Letter


An Open Letter to the Michigan Legislature: Oppose the Medicaid Expansion Scheme

May 14, 2013


Dear Legislator:

On behalf of the11,900 members of National Taxpayers Union in Michigan, I urge you to oppose any efforts to expand the Medicaid program. While the allure of “free” federal dollars as a result of the 2010 federal health care law might be appealing, enrolling more Michiganders in this troubled program would endanger the fiscal well-being of the state while providing little if any health benefits to its enrollees.

New research shows that not only is Medicaid threatening the stability of state budgets with its financial flaws, it is also failing to provide its participants with better health outcomes. The recent Oregon Medicaid study compared a group of new Medicaid enrollees with a similar group of individuals who were not allowed into the program. This provided researchers an extremely rare and valuable opportunity to compare Medicaid participants with a statistically representative “control” sample.

The results cast serious doubt on the ability of this troubled program to improve the health of its beneficiaries. According to the researchers, “This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.” [emphasis added]

This is hardly a ringing endorsement for a program that costs taxpayers well over $400 billion a year.  Indeed, even if Medicaid advocates would prefer to focus on just one of these underwhelming aspects – easing “financial strain” – there are far more efficient ways of doing so than through a massive entitlement program like Medicaid.

The study’s findings are particularly troubling, given the total estimated cost of $800 billion to expand Medicaid through 2022. Even though President Obama has promised that the federal government will pick up the entire tab for the first three years and 90 percent of the cost in the long term, Medicaid expansion will still saddle Michigan with a $1.7 billion budget burden through 2022. This assumes the federal government will not renege on its 90 percent funding commitment, which is partially funded by your state’s citizens on their federal tax returns. As you may know, President Obama has already considered a reduction in federal match rates starting in 2017.  If major tax hikes are to be avoided at the state level in the near future, Medicaid should be reformed to achieve cost savings, not enlarged.

Now that research shows Medicaid provides uncertain health benefits to its participants and very certain burdens to taxpayers, it would be extraordinarily shortsighted to expand the program. I urge you to instead pursue health care reforms that better serve taxpayers, patients, and providers.

Sincerely,
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Brandon Arnold
Vice President of Government Affairs