Alaska: A Case Study in Medicaid Expansion

My home state of Alaska is the latest state to discover the painful side effects of expanding Medicaid under ObamaCare. It’s been roughly a year since Gov. Bill Walker unilaterally made this move via executive order, but the program already costs tens of millions of dollars more than projected for 2016. With the state beginning to shoulder part of the bill for the expansion next year, the program’s higher-than-expected costs now threaten to destabilize a state budget that’s already in disarray.

This is a typical result of Medicaid expansion, and one Gov. Walker should have expected. Although the federal government promises “free money” to cover the cost of the program, there’s no such thing.

Medicaid expansion enables thousands of able-bodied, childless, working-age adults to receive taxpayer-funded health insurance. In Alaska’s case, only about 45% of those eligible under the expansion are currently working. This includes people who may already have private insurance coverage but choose to enroll in the government program instead.

This program is costly. Medicaid’s actuaries released a report earlier this summer that revealed spending per new Medicaid enrollee was 49% higher than expected.

The result is a higher bill for taxpayers. Alaska’s Medicaid expansion was initially expected to cost $145 million this year. Even though the number of enrollees roughly matched expectations, the cost of providing them insurance did not. That clocks in at $175 million, a $30 million difference that’s also higher than the Medicaid expansion’s expected cost for all of 2017, too. (Read more from “Alaska: A Case Study in Medicaid Expansion” HERE)

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