Beginning to evaluate the ACA: Medicaid expansion


By Eric Dent



Eric Dent


As human beings, we must be more wired to think about ideas, visions, plans and imaginings than we are to evaluate them after the fact. How many of us spend a considerable amount of time planning a vacation, but spend very little time evaluating it to see what we can improve upon for the next time? However, evaluation is critical to improving and bettering situations.

We now have a couple of years under our belts with most of the Affordable Care Act, so we can begin evaluating to see whether this policy has performed as forecast by its proponents. We are already familiar with some of its false promises such as, “If you like your doctor you can keep your doctor.”

Another obvious evaluation that you’ve probably read in the news is that the “affordable” care act has turned out to be misnamed. President Obama in his early speeches claimed that the act would “save a typical family an average of $2,500 on their health care costs in the coming years.”

A recent study by Kaiser Family Foundation revealed that the typical family has experienced an increase of $2,976 in just the last couple of years, which does not include the $19,000 in national debt the average family will owe for just 10 years of the Affordable Care Act.

Let’s evaluate some of the less news-making aspects of the act. For me, the most gut-wrenching question has been whether or not a state should decide to expand Medicaid. About half the states in the nation expanded. The obvious benefit to expansion is that federal money would come pouring into the states because they would pay none of the benefit initially and 10 percent ultimately.

In recent years, Democrat Beth Wood, the state auditor, reported that in three years North Carolina experienced $1.4 billion in Medicaid administrative overruns. It is fair to say that paying for the state’s portion of these overruns meant less money for our schools or for state employee raises. Consequently, it is prudent to take on a new entitlement program only after careful analysis, as the projected costs of entitlement programs have historically been vastly underestimated.

In beginning such an analysis, we must start with the realization that people without insurance are not without health care. Hospital emergency departments, by law, cannot turn people away. The Robeson County Health Department continues to operate providing free or nearly free care.

I am certainly not suggesting that this patch of coverage is ideal — or working — but it is the baseline from which any changes should be measured (and in an Oregon study, respondents reported that 61 percent of their needs were met by free care and 78 percent reported that it was very high quality).

The most important question, which has really only been researched in the Oregon health experiment, is if people are healthier as a result of increased health coverage. Paradoxically, this study did not report significant increases in health.

And what about the cost? A recent study by Moody’s Investor Services found that the operating margins of hospitals in states with Medicaid expansion in 2014 did not improve more than those in the states without Medicaid expansion.

A hospital system in Illinois reported approximately these numbers — before expansion they wrote off $9 million of free care. With expansion, patients incurred $28 million in services, of which $14 million was reimbursed by Medicaid. That system has caused $5 million in losses. Another unfilled promise is that expensive emergency room visits would decrease. In fact, they increased 40 percent.

I am still undecided on whether North Carolina should expand Medicaid. Certainly, I favor helping more people. Unfortunately, federal legislation has often ended up hurting the very people it was intended to help. In this case, it seems that it may not be helping or hurting the people who get coverage, but the price tag for the Affordable Care Act is clearly hurting all of us.

Eric Dent
http://robesonian.com/wp-content/uploads/2015/08/web1_Dent_VL.jpgEric Dent

By Eric Dent

Eric Dent is a business professor at Fayetteville State University who lives in Lumberton.

Eric Dent is a business professor at Fayetteville State University who lives in Lumberton.

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