SALLY PIPES: Medicaid’s failure gets harder to ignore

The siren-song of “free money” from Washington continues to echo in state capitals. Thirty-nine states and the District of Columbia have expanded their Medicaid programs to those making up to 138% of the federal poverty level since the Affordable Care Act opened the federal Treasury for that purpose in 2014.

The 11 states that have held out until now are finding it harder to resist. North Carolina lawmakers are considering an expansion, after years of opposition from Republicans. Democrats in Georgia’s legislature have promised to prioritize expansion in the months ahead. Even in ruby-red Wyoming, lawmakers will consider a bill that would expand Medicaid this session.

But as a new study from the National Bureau of Economic Research makes clear, the case for expanding Medicaid has hardly been weaker.

The NBER paper examined eight states that expanded their programs between 1994 and 2005. It found “no evidence of any effects of expanding Medicaid on all-cause, health care-amenable, non-health care-amenable, or HIV-related mortality.”

In other words, despite billions of dollars in spending, Medicaid doesn’t seem to have much impact on the health of the people it serves. Or as the authors of the NBER paper understatedly put it, “One should not assume that state Medicaid expansions automatically lead to reductions in adult mortality.”

This is not the first academic study to cast doubt on the supposed health benefits of Medicaid. A landmark analysis of Oregon’s Medicaid expansion — to date, the most rigorous study of its kind — came to a similar conclusion.

In 2008, Oregon used a lottery system to determine which patients gained access to the program. So researchers were able to compare the health outcomes of newly-enrolled Medicaid patients with a control group of similar patients.

The result? In the first two years after the expansion, the Oregon study found “no significant improvements in measured physical health outcomes” among new enrollees.

Neither the Oregon study nor the new NBER paper assessed the effects of ACA’s expansion of Medicaid. But they should give pause to legislators considering growing their programs.

After all, expansion under the terms of the Affordable Care Act is not “free” to states. The federal government covers 90% of the cost of insuring people who make up to 138% of poverty — $18,754 for an individual as of 2022. States have to pick up the other 10%.

That may sound like a good deal. But that 10% can still add up to millions of dollars a year. Already, Medicaid accounts for nearly four out of every 10 dollars in expenditures in several states. Adding yet more people to its rolls would crowd out spending on such critical priorities as education, transportation and housing.

States like North Carolina, Georgia, and Wyoming should consider this as they debate the prospect of signing more people up for Medicaid. Spending billions to expand a program that has no effect on the mortality of its beneficiaries is the waste exemplified.