Medicaid expansion pressures poor, doctors, state budget

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Last year, almost 25,000 Nevadans found their health plans canceled, thanks to the so-called Affordable Care Act.

The ACA also caused a dramatic increase in the price of individual insurance plans — with Nevada having the largest premium increases in the entire country, according to a national study by the Manhattan Institute. In some plans, the cost nearly tripled.

Plagued by higher prices that consumers found unacceptable, plus a dysfunctional state website, only 38,000 individuals enrolled for insurance through Nevada health link. The originally announced goal: 118,000.

But one program, as a result of ACA, grew exponentially: Medicaid.

On July 1, 2013, Nevada had 320,000 people enrolled in Medicaid. Now USA Today reports over 601,000 individuals are on the state’s Medicaid rolls — following the expansion Gov. Brian Sandoval championed during the 2013 Legislative Session.

Even with these dramatic increases in subsidized coverage, however, Nevada’s uninsured rate remains high: between 12 and 21 percent, depending on who’s counting.

Either statistic provides powerful evidence that the vast majority of the uninsured were uninsured by choice. Even with “free” coverage available, hundreds of thousands find enrolling not worth the bother.

Unfortunately, however, the dramatic increase in Medicaid participants is — as the Nevada Policy Research Institute predicted — having negative consequences for the program’s original, needier enrollees.

Medicaid was originally designed to provide a medical safety-net for very low-income Americans, particularly children. Before the ACA expanded eligibility, over half of Medicaid enrollees were children, while individuals who were disabled, blind or aged made up almost a quarter.

In contrast, the vast majority of the new enrollees are healthy adults, who are often childless and generally healthy.

Add in the fact that, to control costs, the government routinely offers doctors reimbursement rates frequently below doctors’ actual costs and significantly below what they receive from private insurance companies.

Because of this, a 2008 survey of physicians found, only 40 percent of doctors take all new Medicaid patients.

The consequence, here in Nevada — given the state’s well-known doctor shortage — is that the disabled and children from poor families now must compete with over 280,000 newly subsidized healthier adults for appointments with a fixed number of doctors.

For the truly sick, this can be deadly.

Consider what happened to Deamonte Driver, a Maryland 12-year-old. Deamonte, who was receiving Medicaid, had a toothache. His tooth needed an extraction that should have cost just $80. There was a catch, however.

Only 900 of Marlyand’s 5,500 dentists accepted Medicaid. And the Driver family, despite calling over 20 offices, couldn’t get Deamonte a timely appointment. His tooth infection abscessed; the infection made its way to his brain; and Deamonte, despite two brain surgeries, died within a month.

Bottom line: Expansion of Nevada’s Medicaid rolls makes it less likely that those who truly need care will receive it in a timely manner.

Medicaid expansion is also going to hit the state budget extremely hard. A study conducted by Cato scholar Jagadeesh Gokhale for NPRI found that the ACA will cause Nevada to spend an additional $5.4 billion on Medicaid from 2014 to 2023.

The story of Carolyn Oatman, as reported by Phil Galewitz of Kaiser Health News, encapsulates both problems. Oatman, a currently unemployed Reno resident, signed up for Medicaid earlier this year. She likes the program, because it gives her free medicine. There is one downside. It takes her two months to wangle a doctor’s appointment.

So Oatman uses hospital emergency rooms. “I love it on Medicaid, because now I can go [to] the emergency room when I need to and don’t have to worry about the bill,” she said.

Remember when Pres. Obama told the American people that a key reason for passing ACA was so that people like Oatman would find a primary care doctor, instead of going to the emergency room?

So the Nevada Legislature, which passed the state Medicaid expansion, has put itself in a bind: The extra dollars going into Medicaid mean fewer dollars for other priorities, such as education or transportation.

Medicaid-program reforms in Florida and elsewhere are available to Nevada lawmakers, if they’re interested.

However, the basic issue comes down to this: To help the children on Medicaid, exclude healthy adults.

A version of this commentary was originally published by the Nevada Business magazine.

Victor Joecks is executive vice president of the Nevada Policy Research Institute, a non-partisan, free-market think tank. For more visit


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