• All the reasons to expand Medicaid. All the reasons not to.

    Let’s see if we can list all pros and cons for Medicaid expansion we’ve heard articulated. Let’s try to provide links to or about them. I’m making no attempt to exclude reasons that are not supported by evidence. I’m making no attempt to exclude “bad” reasons or include “good” ones. I’m trying to capture them all. We can sort problems out in the comments.

    Reasons why states should expand Medicaid

    1. A large proportion of low income individuals are uninsured.
    2. Even some low income people with disabilities don’t qualify for Medicaid.
    3. Medicaid is good for health (more here).
    4. Medicaid offers financial protection.
    5. Expansion costs states very little; most of the cost is covered by the federal government.
    6. More broadly, health reform saves many states money.
    7. Medicaid expansion supports the economy.
    8. Medicaid addresses the uncompensated care problem.
    9. Politically powerful interest groups (health care providers among them) support expansion.
    10. It would reduce cost shifting.
    11. Expansion supports the broader reform, helping to legitimize it and make it function better. It’s good for Democrats in November.
    12. Providing access to affordable coverage, as well as people taking up that coverage, is our moral duty.

    Reasons why states should not expand Medicaid

    1. The uninsured already have access to necessary health care, even for free.
    2. Medicaid harms health.
    3. Expansion is expensive for states.
    4. Moreover, populations currently eligible for but not enrolled in Medicaid will come out of the woodwork. [I fail to see how this is an argument against expansion, but it works in concert with number 10 below.]
    5. Expansion is expensive in general, as is health reform. The money should be used in other ways.
    6. Medicaid is part of the welfare state that promotes social dysfunction. (See also, this.)
    7. States can extract concessions from the federal government in exchange for expansion, so it is rational to resist until the terms are right.
    8. Republican electoral constituencies do not, on average, benefit from expansion.
    9. Medicaid should be block granted; states should be afforded greater flexibility.
    10. Resisting expansion undermines reform, which is good for Republicans in November.
    11. Medicaid reduces the incentive to work.
    12. Medicaid expansion crowds out private coverage.
    13. The expansion comes with cost-increasing coverage mandates.
    14. Medicaid expansion will exacerbate the effects of a shortage of primary care physicians.

    Which of these above — whether pro or con — strike you as good reasons? Which are supported by sound evidence? Have I forgotten any (either reasons or evidence)?


    • I would humbly suggest a slight rewording to number 8…
      “conservative constituencies are concerned about the long term costs of expansion and affordability”

      I don’t think the opposition to expansion is Republican – my sense is that many Republicans actually are OK with expansion…

      Resistance is coming from Conservatives – who are less and less inclined to think of themselves as Republican…

      What seems to be missing in your list reasons to oppose are two things.

      1. Expansion will force my state to cover things which voters in my state would prefer to not cover [not sure if the Roberts ruling makes avoiding covering mandated items – or covering them fully possible]

      2. Expansion will “lock us in” to covering additional services in the future that will cause costs to spiral out of control [again, perhaps less of a realistic concern based on the Robert’s ruling]

      • I made an update to reflect the sense of 1 and 2. Given what I link to, I’m leaving the “Republican” bit in for now. All governors that have said they are not going to expand or are leaning against it are, in fact, Republican. I am not saying all Republican’s feel the same way.

        • Fair enough – I just read Governor Perry’s letter – he is clearly concerned over who gets to decide what is covered [and at a basic level what gets covered and sees that as important.

    • Another reason for expansion medicaid’s current cutoff produces a huge marginal tax on some people.

      • The same issue arises with expansion too, though. Maybe you can say it is ameliorated by the exchange subsidies, but qualitatively they’re still there at the end of the subsidy range. In any case, have you heard anyone make this argument? Any links?

        • Austin,
          1. Many of the states slip out of expanded Medicaid obligations and many employers slip out of expanded mandate obligations to cover their employees (waivers, willingness to pay fines, lobby to have the law altered). The system evolves toward a form of means-tested vouchers, sold on the exchanges.

          • Somehow pressed a wrong key and posted that prematurely above..
            This is from Tyler Cowen and it is about how envisioned ACA helping with the marginal tax problem.

            1. Many of the states slip out of expanded Medicaid obligations and many employers slip out of expanded mandate obligations to cover their employees (waivers, willingness to pay fines, lobby to have the law altered). The system evolves toward a form of means-tested vouchers, sold on the exchanges.

    • This one is critically important:
      Medicaid harms health.
      Medicaid is good for health (more here).

      I think the evidence is still not consequential. I also think that some reduction of regulations could help. For example, allowing more people to become practitioners (LPNs, RNs,NPs,PAs and doctors) easier would increase access for medicaid patients who currently sometimes find it had to get care. Allowing more medicine to be sold with a prescription would also help.

    • The argument I hear most relates to how Medicaid and its low reimbursements are bad for physicians, and how increasing the Medicaid population will negatively affect quality and access for those with other forms of insurance

      • The low reimbursement rate would make sense as an argument against expansion to the extent that Medicaid crowds out private coverage, which is on the list. Otherwise, since docs aren’t required to accept Medicaid patients, I don’t understand the argument. Poor people don’t pay much as it is.

        As for negative quality impacts for others, that’s a new one to me.

        Can you provide links for either of these?

    • Austin
      On #7 and SK’s piece in WaPo.

      Yes, there is a multiplier effect and money spent for Mcaid beneficiaries has salutary effect in other sectors of the economy, but is this just a post hoc ergo propter hoc fallacy. Because Medicaid exists, its the most efficient (and politically viable) means to move money. In an alternative universe, with an efficient health sector, we would seek other channels?

      It gets down to the baseline inefficiency of the health system. Seems like a Rube Goldberg way to goose the states–understanding options are limited.


      • Is it optimal? No. Is it causal? One would have to investigate the underlying studies carefully to convince oneself of that. It is, at least, plausible.

        I could imagine a theory that says Medicaid expansion is caused by greater economic vitality. Would you believe that story?

    • The bigger concern caused by the low Medicaid payment rates to physicians is the negative effect on access to care for CURRENT Medicaid beneficiaries. Since, on average, physicians in states with low Medicaid fee schedules actually lose money serving Medicaid beneficiaries, most physicians must limit the number of Medicaid patients they can serve. If the number of Medicaid beneficiaries increases, but physician availability to care for them does not increase, we just create more demand for limited services that are already inadequte to serve current demand. Thus making it harder for the disabled and the poorest who are already covered to find physicians who can accept Medicaid payment.

    • I guess the basic reason is that it’s the right thing to do (and I suspect those who oppose it feel it’s the wrong thing to do). In other words, if one distinguishes between justifications and the primary reason the justifications, if they don’t integrate the primary reason lead one to engage on specifics when the specifics are mostly noise and not the point. If we cannot afford it, never mind. But if we can then part of feeling good about one’s country for many is feeling that every citizen isn’t completely on their own if their health is threatened. So in a sense your well being and security in that well-being makes me feel like I live in a civilized community and affects me and everyone else in thousands of ways. The flip side is that this is another handout to those who don’t work hard enough and by expanding it you are just telling those folks not to try harder. You are also helping the Administration achieve it’s goal which may be a giant downside (if the author had been Bush, would Republican governors be behaving this way). In a sense it’s a way of reinforcing one’s previous arguments that this new regime is unacceptable and anything that can be done to stop it is an example of an unwillingness to compromise due to principle (i.e. sell out).

      I am far on the plus side. But as good as your list is I think the underlying true reasons are less in evidence than they might be.

      • I added something to reflect this sentiment, with a link to a new JAMA paper.

        • Thanks for the response and addition. I actually meant less morally than a sense of well-being. My long-winded comment was more of a “broken-windows” argument as applied to coverage of health care — namely that the well-being and sense of respect for the community is embedded in how the least fortunate (at that moment) are treated. Just knowing that they are treated well makes life better for me (and makes me feel safer). So to me, in a sense, that’s in my self-interest. And it also makes my community more attractive (are places where those badly off don’t get health care coverage so attractive, I don’t think so).

      • But, of course, the more generous course would be to subsidize the low-income individuals’ enrollment into insurance that is not limited in the ways that Medicaid is.

        • True enough. I meant that opting out would not accomplish this. But having everyone in one system that was roughly comparable in coverage irrespective of income would accomplish this goal even better.

    • Dear Austin,

      I have an additional consideration for you, although it is related to Contra point #14.

      Chapin White published a study recently that indicated that when access to Medicaid is expanded, overall aggregate use stays constant. He pointed out two mechanisms that could explain this: first, a shortage of physicians willing to take patients (that’s similar to point #14) and second that in many states Medicaid is run as a managed plan, and this management tends to be very aggressive. In any case, if access is expanded, and new members are using the services (and Chapin White doesn’t dispute this), but aggregate usage stays fixed, that MUST mean that there is a drop in the services used by those formerly covered. In short, if there is a fixed pie, and more people get a slice, then the slices must get thinner.

      So I propose a Contra point #15: by expanding Medicaid, the ACA will compromise the level of care that people who are current beneficiaries will receive.

      Do you want a reference for this? In fact, I read about the study at the Incidental Economist, so if you want a citation for the paper you can search your own blog for “Chapin White”. In fact, it was picked up by Avik Roy, and there was some controversy over this, so it’s one of the more high-profile posts on this site.

      • It sounds like my #14. I actually don’t recall the paper. I believe you I’ve posted on it. If you can dig up my post or the paper, I’d appreciate it. Once I take another look, I may rephrase my #14 to incorporate it and add the link.

    • It’s not clear how 1 and 2 in the pro column are distinct from 12. Aren’t 1and 2 reasons only given 12? Or do you mean something else?

      Also, the economic benefit argument in 7 could be unpacked into multiple reasons. The multiplier for Medicaid funds likely has many mechanisms. To list a fewhealth not mentioned: expanding Medicaid increases labor mobility which improves the labor market (competition) and improves quality of life (one less reason to stay in a job a person hates) and improves entreprenurialism. I have seen that last argument made in the context of the ACA generally, but it stands to reason that Medicaid expansion is responsible for some portion of the effect.

      On the con side, there are people who believe we have a moral obligation not to redistribute wealth. It is theft. That is not the same as the argument that there is an economic drag.

    • Also, I don’t think the first con argument is a reason by itself. Is the argument that it is already easy to get Medicaid and people don’t value it enough, so why expand something people don’t value?

    • Regarding #4 against… If you increase enrollment in states where many eligible residents are not currently enrolled, the state is on the hook for the existing state/federal split for those residents first. For Texas, where a quarter of eligible residents are not enrolled, that means paying for all of these current eligibles incrementally at 40% of costs plus the substantial additional administrative costs of expanding the program. These costs are not trivial.


      • It sounds like an argument against coverage for existing eligibles, not against expansion. Since the existing, not enrolled eligibles would presumably only enroll due to the other aspects of the law (enrollment facilitated by exchange, mandate, all the publicity of those), it therefore sounds like an argument against the whole law, not expansion per se. Since my post is about arguments against the expansion, and only that, I stand by what I wrote. I am not seeing how wishing to resist coverage for currently eligible people is an argument against expansion for different people.

    • Clarification on #4 under Reasons why states should not expand Medicaid:

      If someone who is currently eligible for but not enrolled in Medicaid “come[s] out of the woodwork,” that person will likely not fall into any of the expansion categories but rather would be part of a state’s current Medicaid eligibility group. This group is not covered by the ACA funding for expansion but rather is funded through normal state/federal Medicaid channels, thus potentially requiring states to come up with more $$ – something they are loathe to do.

    • The stingy states (i.e. Florida, Arizona, Louisiana, Texas) do not need the new Medicaid expansion to be fearful.

      They are fearful if just the people who are currently eligible actually sign up.

      For years the stingy states have used long involved forms and super-low income limits to keep many of the poor from getting Medicaid. Plus, some portion of the poor in those states are functionally illiterate.

      The latest estimate I saw was that 12 million people are currently eligible for Medicaid but not getting it.

      Even with the generous matching rates that Southern states were given to coax them into Medicaid, adding 12 million people will hit state budgets and hit them hard.

      These states are not just fighting against ObamaCare. They are fighting against Lyndon Johnson care.

      Also —

      Northern liberals, and I say with no malice that this blog is run by northern liberals, have no idea how much white southerners dislike minorities, in general.

      The unspoken feeling in red states is that we never asked these black people to have high birth rates, in fact we discouraged them in every way we could. And we never asked these Mexicans to stay after the harvest, although we enjoyed their cheap labor.

      The secret feeling of the South and West has been that if the liberal states like NY and Illinois and MInnesota are dumb enough to offer generous health benefits, then by all means the minorities should be encouraged to move there. (as they have, ever since 1925 in some cases.)

      Michael Lind once said that if the southern border of America was the Mason-Dixon line, we would have had national health insurance 40 years ago.

      Bob Hertz, The Health Care Crusade