Socialized medicine has been the goal of Progressives for over 100 years. Yes, since the days of President Teddy Roosevelt, the first Progressive president, there has been a move to socialize all medical care. That means government control of healthcare.
ObamaCare was passed in 2010 without a single Republican vote, but it represented a major step forward in this process of socializing medicine. At the time, Vice President Joe Biden was caught on a hot mike telling President Barack Obama “This is a big f______ing deal!” Yes, Joe, it is.
Recognizing it was politically impossible to come right out and say they wanted socialized medicine, the Obama Administration pushed through the Affordable Care Act with a provision that forced all states to accept expansion of Medicaid to previously ineligible Americans. However, the Supreme Court struck down this provision of the bill and left it up to the states to decide if they wanted to expand their Medicaid.
The expansion of Medicaid in the ACA (ObamaCare) called for no cost to the states for three years, but thereafter they would have to pick up the tab. This bargain with the devil has had severe consequences for many states who accepted the deal.
The AP says that California expected 800,000 new enrollees after the state’s 2013 Medicaid expansion. The real number was 2.3 million. In New Mexico, new enrollment exceeded estimates by 44%. In Oregon actual enrollment exceeded expectations by 73% and in the state of Washington by more than 100%. Needless to say this has crushed the budgets of these states. Illinois once projected that its Medicaid expansion would cost the state $573 million for 2017 through 2020. But enrollment has exceeded expectations by 200,000, leading to a new price tag of about $2 billion, according to the Chicago Tribune.
Alas, many more states have given in to pressure to accept the Medicaid expansion and now we are learning of other severe consequences. In addition to blowing up the budget of many states, many hospitals are closing their doors.
Hayden Dublois and Michael Greibrok, writing in The Wall Street Journal, says there are only 10 states left that have resisted the Medicaid expansion. They are the lucky ones!
They reported their new research which looked at 4,000 hospitals nationwide, examining their federal filings to see how they fared financially. In 2013, the final year before ObamaCare’s implementation, hospitals in expansion states reported just over $10 billion in losses due to Medicaid. The most recent data, from 2021, show the shortfalls ballooning more than 115%, to $22.3 billion. By comparison, the shortfalls in states that didn’t expand Medicaid grew by only 6%. When the data from 2022 and 2023 become available, they’ll likely show even bigger losses in expansion states.
Such massive red ink is written into Medicaid’s flawed design. The program reimburses hospitals a mere 78% of what Medicare pays for the same treatments and procedures, and 62% of what private health insurance pays. Expansion pushes far more people off private insurance and onto Medicaid, meaning hospitals make less on the same patients they may have seen before. And they’re seeing far more Medicaid patients than expected. As of last year, nearly 20 million people received Medicaid through expansion nationwide, compared to initial state estimates of less than seven million. All of them are able-bodied adults. Total Medicaid enrollment is more than 90 million.
Hospitals must cover the shortfalls somehow, but they have no good options. They can lobby state lawmakers for more taxpayer funding, which is a challenge in an era of tight budgets. More likely, they’re raising the costs they charge to private health insurance companies. In other words, they’re forcing some patients to pay more because Medicaid expansion recipients pay less. That necessarily drives up the cost of health insurance, which rose 4% between 2022 and 2023 and another 4% heading into 2024.
The soaring costs persist because Medicaid expansion continually shrinks the number of people on private health insurance. Every year, there are fewer people to stick with higher prices and more people paying less than the cost of the care they receive. There’s a name for that: A death spiral, and it’s already killing hospitals nationwide.
In the South, Arkansas’s Crittenden Regional Hospital had a nearly $7 million surplus before Medicaid expansion. It closed in 2014 after profits turned to losses. In the Midwest, Illinois’s Westlake Hospital managed a surplus before expansion, but by 2019, a nearly $7 million loss pushed it out of business. Rural hospitals appear to be hit the hardest. At least 12 have closed in expansion states despite promises from activists and experts that expansion would not only save rural hospitals but also add hospital jobs.
The facts haven’t stopped ObamaCare’s advocates from demanding that the 10 holdout states embrace this foolishness. The way they tell it, these states are heartless, leaving needy people out in the cold. Yet Medicaid expansion hurts the needy, since it forces some of the most vulnerable patients to compete with able-bodied adults for the same care, making wait times and health outcomes worse.
In summary, Medicaid expansion is bankrupting states and hospitals. Many hospitals are closing their doors because they can’t keep up with the red ink and they can’t pass the losses along to their private patients. The net result; less state money for education and other priorities, fewer hospitals to care for the needy -especially in rural areas, poorer care for more patients, and higher private healthcare insurance policies. It’s clear that 10 years after ObamaCare we’re still seeing the negative impact of this disastrous legislation.
