Twelve Reasons to Say No
Virginia got it right; Florida got it wrong.

Virginia governor Bob McDonnell


Avik Roy

3. Medicaid’s access problems will get worse as more doctors drop out.

According to the Urban Institute, there is considerable concern about whether there will be enough doctors to see the influx of new Medicaid patients.  While Obamacare provides for a two years of increased federal Medicaid payments for primary-care physicians, it seems unlikely there will be a permanent increase in participation among privately practicing physicians since the increase in federal payments for primary-care physicians will last only two years. The biggest problem in Virginia will be in developing sufficient capacity in the southern and southwestern parts of the state, where enrollment increases will be the largest and provider shortages the greatest.

4. Claims about job creation are exaggerated.

The claim that Medicaid will “create 30,000 jobs” in Virginia uses out-of-date Keynesian models that have been eminently disproven over the last six years. These same forecasts were used to predict that the American Recovery and Reinvestment Act of 2009 (ARRA) — commonly known as the “stimulus” — would bring the national unemployment rate below 6 percent by 2012. Instead, the unemployment rate has remained around 8 percent.

Those who claim that the Medicaid expansion will create jobs should be required to explain, specifically, how their forecasting models differ from those used to project unemployment rates under the ARRA.

5. Claims about coverage expansion are exaggerated.

Studies that claim 400,000 Virginians will be denied coverage if the Commonwealth doesn’t expand Medicaid do not account for the crowding out of private insurance. Medicaid will end up replacing higher-quality, employer-sponsored health coverage for tens of thousands, if not hundreds of thousands, of Virginians. While these individuals will still have “coverage,” and therefore will not increase the ranks of the uninsured, the quality of their coverage will meaningfully decrease.

Coverage is not the same thing as care. Medicaid has the worst health outcomes of any insurance program in the developed world. While Medicaid recipients have a card saying that they have health insurance, they have very poor access to physicians. This makes it hard for them to get care when they need it, as proven by the University of Virginia study cited above. Expanding Medicaid will create a cascade of unintended consequences for Virginia taxpayers and citizens.

6. Medicaid raises premiums for those with private insurance.

One of the hidden costs of expanding Medicaid is its impact on people with private insurance. Because both Medicaid and Medicare underpay doctors and hospitals for their costs of care, these providers make up the difference by charging higher rates to private insurers. In 2008, Milliman, the leading insurance consulting firm, estimated that the average American family with private health insurance paid $1,800 more in premiums because of this cost-shifting phenomenon. By dramatically expanding Virginia’s Medicaid program, the Commonwealth will impose a hidden tax on the millions of Virginians with private insurance.

Because expanding Medicaid leads hospitals and doctors to shift costs onto patients with private insurance, this makes private insurance less affordable and increases the number of people without insurance.

Therefore, expanding Medicaid will lead to more people losing private health insurance — a fact that is not included in the standard assessments of how much Medicaid expansion would increase coverage.