Government Watch

10 Myths About Obamacare Medicaid Expansion

from Heritage Foundation – by Alvene Senger –

As Obamacare Medicaid expansion is being debated in the states, many myths are being perpetuated by its advocates. Here, Heritage provides the research to debunk such myths:

1. Myth: Expanding Medicaid is “free money” for the states.

Reality: The expansion adds an estimated $638 billion in new government spending from 2013–2023. New spending at the federal or state level is reckless in light of the country’s trillion dollar budget deficits and over $16 trillion in national debt. As Governor Rick Perry (R–TX)stated, “[T]here is no such thing as ‘free’ money. We know there’s only money that’s collected from taxpayers, and money borrowed from other countries like China against the good credit of our children and grandchildren.”

2. Myth: Expanding Medicaid will entail little to no costs to the states.

Reality: Within three years, costs would exceed any projected savings. Heritage research shows 40 of 50 states would see increases in costs due the Medicaid expansion. If all states expand, state spending on Medicaid would increase by an estimated $41 billion by 2022.

3. Myth: Medicaid expansion can bring savings to the states.

Reality: Analysis by Heritage shows that by 2022 any projected state savings are dwarfed by costs. Moreover, these projected savings assume states will further reduce payments to hospitals and clinics for uncompensated care. But, as Heritage’s Ed Haislmaier points out, it is more likely that hospitals will lobby state legislatures for more money rather than less.

4. Myth: States can opt out of the Medicaid expansion if they change their mind later.

Reality: Some proponents of the expansion claim that states could drop out of the expansion if the federal government reneges on its commitments. But as legal experts Robert Alt and Dan Greenberg state, “[I]n fact, there is substantial reason to believe that when a state chooses Medicaid expansion, it is something like a decision to go down a one-way street” and that “legislators are mistaken to ignore the possibility that expansion cannot be abandoned as easily as it was entered.”

5. Myth: States can circumvent Medicaid requirements for the expansion population.

Reality: In its recent Frequently Asked Questions, the Centers for Medicare and Medicaid Services (CMS) clearly states that beneficiaries under any premium support arrangement would still be Medicaid beneficiaries, “entitled to all benefits and cost-sharing protections,” and that states must provide “wrap around” to fill in any gaps. As Ed Haislmaier has pointed out, “[A]ny state that agrees to the Medicaid expansion will get exactly what the term expansion implies: simply a bigger version of the same expensive and dysfunctional program.”

6. Myth: States must act quickly before Obamacare cuts hospital payments.

Reality: Hospitals are pushing states to expand Medicaid coverage because Obamacare is going to reduce their payments for uncompensated care by $56 billion over 10 years. However, the President’s latest budget proposes delaying the Medicaid disproportionate share hospital (DSH) payment reductions until 2015, which raises questions over the future of the cuts. But regardless, as Heritage’s Nina Owcharenko points out, “[m]aybe it is time for the states to tell the hospitals to shift their attention to the real problem: Obamacare.”

7. Myth: Hospitals will go out of business if states do not expand Medicaid coverage.

Reality: Hospitals have been lobbying hard on the idea that without expansion, the Obamacare uncompensated care payment cuts will be unsustainable for their business. But according to Ohio Media Trackers, about 80 percent of Ohio hospitals would still net millions in profits if their charity care was cut.

8. Myth: States can trust the federal government to keep its funding promises.

Reality: “Although Obamacare stipulates the federal government will pay at least 90 percent of the benefit costs of the Medicaid expansion,” Heritage explains, “state lawmakers have no guarantee future Congresses will keep that promise.” In fact, the Obama Administration has already proposed changing the deal in its fiscal year 2013 budget proposal.

9. Myth: Medicaid expansion will help low-income workers out of poverty.

Reality: Medicaid expansion actually locks low-income workers in poverty because of its backward incentives that discourage work. As Dan Greenberg explains for Advance Arkansas, “[E]mployees who earn too much money—or who work too many hours—face a set of unpleasant choices. They can quit. They can work fewer hours. They can decline raises. Realistically, a large number of employees who face such choices will opt to preserve Medicaid coverage by reducing the hours they legally work.”

10. Myth: Medicaid is quality health coverage.

Reality: Research has consistently shown that Medicaid produces worse access and health outcomes than private insurance. As Heritage’s Kevin Dayaratna writes, “By further expanding this broken program, Obamacare only exacerbates the situation by adding millions of low-income Americans to a failing program.”

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Susan C
7 years ago

If our elected officials don’t want it, what makes anyone think it would be good for the voters who elected them.

7 years ago

I do not think that health care should be nationalized and I am no fan of Obamacare. However, I have to say that I have a preexisting condition and under 65 and I cannot get individual healh care insurance. I have been told that I would have to use Medicaid which is a joke. If I am forced to retire this summer, this is going to be an issue for me. They say that preexisiting conditions will be offered with the Exchanges, but if it is, it could be very expensive. Not complaining but this is difficult and scary. I… Read more »

Gary Ross
7 years ago

Why do they keep calling it obamacare? He doesn’t care. The only thing he cares about is the destruction of this nation, it’s values, and it’s Constitution. I really dislike when our government gives friendly and deceiptful names to programs to try and trick us into believing something else. Simply put, trickery and deceipt are the tools of satin. How about the “Patriot Act” for example? Clearly a term that envokes goodness and dedication, as a true patriot. What was it really designed to do? Strip away our Consitutional rights! Some may argue that it is for our own protection… Read more »

Ernie White
7 years ago

I agree the bill is a no winner. How do you think this bill will be paid? You the tax payer will pay it!!
Higher tax from State & the U.S. The hospitals will put you out when you should should still be in there.
The doctors will give you less care. Reason they are not getting paid what they are use too.

Barbara DeBolt
7 years ago

Having read the book “Obama Nation,” before he was first elected, I was from the beginning totally anti Obama, and now all the dire predictions are coming through. Judge Roberts betrayed us in supporting the Obama Care program. He is certainly a big disappointment. Our gov’t could have established a million dollar medical account for every uninsured person in 2008 (as described by Dr Ben Carson, whom I admire very much) and that cost would have been a drop in the bucket as opposed to this horrible mess that is Obamacare. In addition to this Obamacare horror, something worse is… Read more »

Bob Ellis
7 years ago

Anyone who lived through the Vietnam ages knew it was a lie. But now what? I rag my elected legislators daily and all I get back is oh we helped so many of the poor get medical treatment in the Delta region or we don’t have the votes. Is there not something to do NOW? Everyone knows the longer a stupid thing like this remains the harder it is to get rid of it.

7 years ago

I didn’t think we had the option of reading the bill first!

7 years ago

Exactly why I dropped my AARP membership two years ago. Lies, lies, lies! Recall who was right out front, leading the charge into the OBAMA Tax Increase – AARP! AARP lied to us then and finally the truth about this morally corrupt President, his cronies and the TAX Increase is coming out. Thanks Amac – Keep up the good work!

Jim McGovern
7 years ago

Let’s face it folks, Obama, Nancy, Harry,& the rest of Obama’s supporters should be thrown out of office. They are destroying the cherished American way of life,liberty, & pursuit of happiness. Obama needs to be impeached simply on the fact, that he is not defending his oath of office which he swore to protect & defend!!

Amy Davis
7 years ago

I have Medicare Part A, I refused Part B because I won’t go near doctors or hospitals, which IMHO are the source and cause of more disease than any other factor. Does anyone know if my Part A meets the requirements of Obamacare or if the Fuds are going to take more out of my social security check for “insurance” which I don’t want, don’t need, and wouldn’t use.

richard alexander
7 years ago

just exactly where do all these dummies think the federal gov’t. gets the money they are going to give to the states?

7 years ago


Jim J
7 years ago

I love the way these people ‘pick and choose’ their sources to slant an argument in their direction.
If’s and could’s and likely’s and may’s and ‘the sky is falling!!’

Johnnie Rae McHan
7 years ago

Nothing Obama care does is good for Americans and our Governor here in Mississippi is smart enough to know this. I support Gov. Bryant’s decision to opt out 100%. At least our reps get to opt out of Obamacare altogether-lucky they can write themselves a different law from we the people.

7 years ago

What a surprise…government lies! Then the American taxpayer is left with paying the bill.

7 years ago

This article is of no surprise. we didn’t read the ‘bill’ first.

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