Medicaid has been in the news a lot lately. Democrats would have you believe that Republicans, especially President Trump, are out to gut Medicaid. They want you to believe millions of people will die without Medicaid if this is allowed to happen.
There’s a Greek word for this – Hogwash! I’ve been writing about Medicaid since 2014 and it’s about time to set the record straight. Here’s what I said in 2014: “It is a favorite talking point of the left that the expansion of Medicaid will “save lives”. Liberal journalist Scott Maxwell of The Orlando Sentinel made this exact assertion recently in a column. It’s easy to see why Maxwell might believe that. Without information to verify that assumption, one would assume that giving people Medicaid insurance would improve their health and, in some cases, even save lives.”
But research often refutes our sincere assumptions. In 2008 the State of Oregon was faced with a dilemma. They wanted to expand Medicaid eligibility to more residents but they didn’t have enough money to pay for everyone. So they held a lottery for low-income, uninsured adults. This created an ideal situation for studying the impact of Medicaid in a randomized, prospective manner.
This study, known as The Oregon Health Insurance Experiment, is an ongoing study, which has already revealed significant information. Thus far, researchers have learned that having Medicaid does not improve health, at least in standard measurements of blood pressure, blood sugar, and cholesterol. Medicaid reduced observed rates of depression by 30% but increased the probability of being diagnosed with depression. Medicaid significantly increased the probability of being diagnosed with diabetes and the use of diabetes medication, but did not have the expected impact of lowering blood sugar.
It has always been postulated that the uninsured are more likely to use Emergency Rooms at hospitals for their health care than the insured. By this reasoning, expansion of Medicaid would lower the use of hospital Emergency Rooms and contribute to solving this chronic problem, which poorly utilizes health care resources and increases costs. Unfortunately, the Oregon study showed the opposite. Those with newly enrolled Medicaid were 40 percent more likely to use the Emergency Room than the uninsured. This means expanding Medicaid will actually exacerbate this problem and increase the cost of delivering health care.
How to explain this surprising truth? John C. Goodman, founder of The National Center for Policy Analysis, explains this in his book, Priceless. Goodman says having Medicaid may actually be worse than having no insurance at all. That’s because most doctors do not accept Medicaid patients and the ones who do often ration their appointments making waiting times very long. Medicaid patients respond by going to the Emergency Room where they are sure to be seen the same day.
So, Medicaid is actually the worst type of healthcare insurance in America. Yet, it continues to expand its enrollment. Medicaid has grown from about 52 million Americans in 2010 to 72 million in 2024. The cost of Medicaid has grown from about $402 Billion in 2010 to $894 Billion in 2024, more than doubling in 15 years. It now exceeds the Defense Department budget of $841 Billion. It has grown 7.9% just since 2023. Clearly, Medicaid costs are out of control.
What has caused this rapid expansion of the cost of Medicaid?
I will address this question in the next post.