The case against Medicaid expansion

The proponents of Medicaid expansion are unabashedly brandishing their rhetoric-based talking points claiming the measure would do everything from creating thousands of jobs to bringing revenue to our state.

Among these are claims that passing the expansion would save hospitals money, make Montana a healthier state, and incentivize people to be more proactive about their health — all things that I support. The problem is that Medicaid expansion does not produce these results.

“Medicaid expansion would create thousands of new jobs.” “Expansion would cover 70,000 of Montana’s uninsured.” “Montana would receive $750 million in new Medicaid funding each year.” These are all statements I have heard while listening to arguments in favor of Medicaid expansion. Unfortunately, these numbers do not add up.

For every five new individuals Medicaid expansion would cover, supposedly one new job would be created. But with Medicaid reimbursement rates as low as they are, extending coverage to more people, even with the temporary infusion of federal dollars, would strain healthcare facilities and increase insurance costs — not increase healthcare jobs in our state.

Our state already has over 70,000 residents who are uninsured, making Montana 39th nationally in terms of insurance coverage. If we were to pass Medicaid expansion, and allow insurance costs to increase, even more Montanans would be prevented from purchasing affordable insurance, pushing more Montanans onto government programs or bypassing insurance altogether.

In short, passing the expansion would create a continually increasing population of people on Medicaid or without insurance, while having little or no positive impact on the job market in our state.

Yet another argument being made in favor of passing Medicare expansion is that the federal government will provide a significant portion of the funding. However, this “new funding” would make Montana almost entirely dependent on the federal government to meet our growing healthcare obligations. While many believe that we should take the government funds because if we don’t, some other state will, they fail to recognize the consequences of doing so.

This expansion money isn’t just “available”, it’s not free, and it most certainly doesn’t come without strings attached.

There is no such thing as a free lunch — and in this case, expanding Medicaid in our state via federal funds would be the equivalent of leaving future generations of Montanans with a lunch bill from a five star restaurant. 

By expanding Medicaid and taking funds from the federal government to pay for the first three years of the expansion, we would not only be exacerbating our national financial problems, but placing our state in a precarious future financial position—and I can’t support a measure that threatens the fiscal stability of our state, even if it does have the potential to provide positive impacts in the short-term.

One of the more illogical arguments being made in support of Medicaid expansion is that it will somehow make our state healthier and motivate people to lead healthier lives. This is a false statement and without merit.

It has long been recognized by economists, financial analysts, and insurance companies that those who seek to accept the least amount of responsibility for their actions, are generally the most likely to engage in high-risk behavior. For example, if you purchase car insurance and ask the insurance agent for the lowest deductible plan available, your request signals to the insurance company that you are most likely the type of driver that is likely to drive recklessly.

Similarly, if we adopt an expansive, taxpayer-funded, approach to healthcare, it creates what is known as a moral hazard problem — the hazard being that when individuals are not responsible for the costs associated with their actions, they are more likely to continue cost prohibitive, unhealthy habits.

Instead of looking to the federal government for help in addressing the rising number of uninsured Montanans, we need to look at the root of the healthcare problem, and seek the solution at its source.

One issue that has been causing healthcare and insurance costs to skyrocket is the alarming number of frivolous lawsuits that are filed. These lawsuits force physicians to practice defensive medicine — the practice of ordering medical tests, procedures or consultations of doubtful clinical value in order to protect against malpractice suits. According to surveys of healthcare professionals conducted by Jackson Healthcare and Gallup, defensive medicine practices cost the U.S. an estimated $850 billion annually.

From limiting frivolous lawsuits, to requiring the Department of Public Health and Human Services to provide statements to Medicaid recipients detailing the type and cost of medical services provided, there are many ways we can tackle high healthcare costs without burdening taxpayers and future generations of Montanans.

It is my goal to look for ways to solve our healthcare problems in a sustainable, fiscally feasible manner — and expanding Medicaid just doesn’t fit the bill.

Rep. Daniel Zolnikov, R-Billings, represents House District 47 and is a member of the House Taxation Committee, House Federal Relations, Energy, and Telecommunications Committee, and the House Local Government Committee.