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  • Think Medicaid Expansion is a Good Idea? Think Again.

    Tennessee Infant Mortality Rate

    Most everyone agrees that decreasing the number of the uninsured is an important goal of health care legislation. What is not agreed upon is the best way to achieve that goal. Obama’s health care plan depends on expanding the number of Americans enrolled in Medicaid – the government-run program for the poor and disabled. The Congressional Budget Office (CBO) estimates the Senate bill would account for about 50 percent of the reduction in the uninsured population at a cost of $395 billion over 10 years.

    New research by Heritage’s health fellow Brian Blase presents evidence suggesting that Medicaid expansion would be both costly and do little to improve the health of the uninsured. Blase examines the “TennCare” program, a Tennessee public program enacted in 1994 that dramatically increased the expansion of Medicaid to Tennessee’s uninsured population. The TennCare program quickly added over half a million individuals to Medicaid, enrolling one-fourth of the entire state. And costs also skyrocketed. Per-capita Medicaid spending from 1994-2004 increased by 146 percent in Tennessee, which was over double the national average increase of 71 percent.

    The most shocking result of Blase’s analysis was not just the increase in costs. It was the apparent lack of improvement in health outcomes in Tennessee in the years following TennCare’s enactment. Blase concluded that, relative to eight surrounding states, the quality of health care in Tennessee actually declined after the expansion of Medicaid. The decline in Tennessee’s mortality rate for 15-64 year olds – those most likely to be impacted by TennCare – compared less favorably after TennCare to the states surrounding Tennessee that before its enactment. On average, the mortality rates of the eight surrounding states to Tennessee declined by 5.2 percent from 1994-1998. Tennessee’s mortality rate declined by only 2.1 percent.

    The lessons learned from TennCare should serve as a warning of what we should expect from a national program of Medicaid expansion. In short, it will be costly and will do little to improve health care quality in the United States. The notion of expanding coverage is meaningless if it does not improve the health of the uninsured. There are seemingly dozens of ways to increase insurance coverage with better results than a vast and costly expansion of Medicaid. Congress should strongly consider the weaknesses of the Tennessee’s experience before they prescribe the nation similar medicine to TennCare.

    Rick Sherwood currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Obamacare [slideshow_deploy]

    31 Responses to Think Medicaid Expansion is a Good Idea? Think Again.

    1. Jim Froelich, Bonham says:

      Outstanding work and comments. It is especially thought provoking to state that expanded coverage at any cost is worthless when it does not improve outcome.

    2. LegalTender, USA says:

      It might help if Medicaid were converted to a rationed, HMO-type program, with expanded use of local clinics and nurses as opposed to emergency rooms. How and where the care is provided drives costs and outcomes and the services of networks of Doctors and hospitals are negotiated and pre-purchased. No longer can the enrollee go to the local fraudster without oversight.

      Certainly, families above the poverty level should be charged co-pays for Medicaid or at higher incomes, premiums.

      Finally, federal funding should be switched to block grants assuming an HMO/Clinic based system and co-pays and states that choose to spend more should do so without Federal help.

      So- an expansion of Medicaid could work, but certainly not using Medicaid's current format. Obama talks a good game regarding rationing care based upon effectiveness- let him start with those relying on charity.

    3. Rich says:

      with up to 38 million illegal immigrants receiving health care

      this will finally transform America the way Obama had it planned..

      after govt takeover of health care comes amnesty for these numbers

      plus up to 5 family members.. say goodbye to America!!!


    4. South MS Conservativ says:


      Joe Tegerdine is running for congress in Mississippi Check it out!


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    6. Barbara Frances Delo says:

      This is a critically important article. I am a nurse and this article describes what we medical professionals know. Putting government in charge of making medical and funding decisions about patient care leads to poor outcomes. People who have gone to medical school have the experience and knowledge to make those decisions, not elected officials who are deciding on the financial bottom line and the impact on the next election. It is dangerous to take medical decision making away from medical professionals and give it to the government!!!

      And BTW nurses are critical too. They have the skills to assess the patient, the hands to provide careful and kind care, and the voices to speak out on behalf of their patients.

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    8. Steven Bellevue, Neb says:

      I have experience with the Veteran Administration medical system, Medicare, Medicaid and the British National Health Service all of which are filled with many serious problems! So to expand Medicaid is pure insanity! How about our federal government arresting and deporting all of the illegal aliens who feed off of all our government based entitlements and how about reforming our immigration system by stopping the immigration of impoverished people to America! Oh no our government would never do something that would benefit hard working American Citizens its not part of their Marxist end game!

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    10. RJSgso, Greensboro, says:

      "The notion of expanding coverage is meaningless if it does not improve the health of the uninsured." I think this is the most important sentence in the article.

      If only the "Health Reform" bill were about health care, rather than about expanding payouts to the insurance companies.

      Insurance is the problem, not the solution.

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    12. Rick Katy, TX says:

      Has the government been able to function as an originator and operator of any federal program? The answer is a resounding NO! It is believed the founding fathers thought so by the way the powers were distributed in the Constitution as applicable to the three branches.

      That's probably why Jefferson said: "Keep the government small, and the purse strings tight."

      Another worth remembering is: "Friends to all; entangling alliances with none." That little quote can be aptly applied to our congress and the executive branch.

      It's just too sad that the people in positions of authority never studied history.

    13. SparetheChange - Rur says:

      18 million of the 31million who are to receive "health care benefits" under the administrations health care proposal will receive them through an expansion of the Medicaid program. This is to be in part financed by cutting 500 million dollars from Medicare, a program which already is underfunded. Why is Congress considering

      such action?

    14. Lee White Tanks AZ says:

      There simply is no way for there to be a multi-hundred $Billion cut in medicare/medicaid outlays without a reduction in service levels. It can not happen.

      With reduced levels of care the only certain outcome will be more dead people. Slight-of Hand won't make this go away.

      One can not get around the concept that the national death rate will increase.

      PC is Thought Control


    15. Meredith, Tennessee says:

      It's unconstitutional. That's all you need to know. If a sovereign State wants to meddle in the health care industry, that's the business of the State's citizens. For the federal government to do it is illegal. Medicare and medicaid are illegal. We don't need the Supreme Court to tell us this. We can read the Constitution for ourselves.

    16. Jeanne Stotler,Woodb says:

      Prior to 1900, when you came to this country you had to show that you could provide for yourself and your family, my grandparents, did this when they came from Denmark. We cannot put all the blame on the immigrants, although illegals take a large share of the blame, we have five generations now of people who are on the dole. I had one woman tell me, when MLK was assasinated, that she encouraged her teen daughter to get pregnant so they would keep getting food stamps, medicaid etc. I know there are those who are out of work through no fault of their own, these should get TEMPORARY help, Medicaid, welfare should not be allowed as a means. The laws were passed but no ones enforces them equally, the same goes for anchor babies, stop giving citizenship to these and see how quick they stop producing, revoke the citizenship of those who were concieved just to circumvent the law. I read about a border town in Calif., there are those who come over, rent a mail box and then come back to Calif. to have their babies so they can claim their kid was born in USA and a citizen, then get WIC and other free help. Close the loop wholes.

    17. Drew Page, IL says:

      Apparently our neighbors in Canada have found a way to provide free health care to all its residents.

      Maybe those here without health insurance could become "undocumented Canadians" whenever they needed health care. It wouldn't exactly be unprecedented. Canadians who don't like their own health care system seem to have no trouble coming into the U.S. for it.

    18. Ken in SB says:

      It would be helpful for you to provide information on current based on TennCareII? Your information is based on 6-16 year old statistics and charts. Bresden initiated changes and Tenn had to make cuts. Just like the current administration's health care program, Americans can expect refinement like Tennessee's plan required..

    19. Cincinnati Rick says:

      Any solution that does not give the consumer of services more "skin in the game" will never contain costs. Anything that is "free" WILL BE ABUSED. There are already way too many people getting "free" healthcare and paying no income taxes…they are freeloaders and not contributors…serfs of the government. Insurance may be a gamble and even a scam but government healthcare programs are a gigantic ponzi scheme. Medicaid is Welfare and Medicare is going broke…so we're going to solve something by adding to these boondoggles? Gimme a break.

      Oh yes, if you had a single-payer system, the government could (as it does in Britain and Canada) ration care. This would reduce costs in the aggregate…with a huge advantage in control over the spigot compared to what private insurance companies can hope to achieve. But at what price? Fulfilling the "death panel" prophesy…vindicating Sarah Palin? Go for it! And we'll probably end up with her in the White House thanks to your stupidity.

      No, we need to address the costs of the procedures and products themselves. Just as we need to address the costs of education. Instead of more funding for education, something needs to be done about the horrendous costs…otherwise we are simply continuing to enable costs to spiral out of control. IN ALL AREAS, we have too many consumers who have little if any personal cost to themselves and therefore NO SKIN IN THE GAME as an incentive to demand a reduction in costs.

      We have the military's $1000 toilet seats and the hospital charging $10 for an aspirin. We have $50,000/yr for Ivy League College education. If we are ever to get serious about any of these absurd costs, we must attack the source….the components that are built in to these prices.

    20. MIKE RODGERS says:

      Capitalism is not understood by the LEFT! Basic math to them is govt. hand outs!

    21. Duane Phinney Pensac says:

      Overhaul health care? He means control health care, big difference. This business about the big bad insurance companies is totally bogus. Insurance companies are regulated to death by the States. They can not raise their rates a nickle without State approval. The problem is that States like California demand insurance Co's cover everything from acupuncture to cosmetic surgery, sure they will cover it but someone has to pay for it. Adding 30 million uninsured to Medicaid is a joke, maybe 1 in every 600 Doctors treat Medicaid patients. Make no mistake about it, under Obama care health care will be rationed and rationed severely.

      This will also be a huge burden on the taxpayers of the states that do not get the corn husker deal.

      As for Canada care, their Premier went to Florida for major heart surgery. All at risk pregnancies are flown to the US for care.

    22. Rick74 says:

      While this research is both relevant and significant, it represents only the first four years after the TennCare Program was implemented.

      It is now 2010. Is there any new data either supporting or refuting the case presented?

    23. Carol, AZ says:

      Looking for revenue for America?

      Fine all Buss"s that hire illegals .

      Starting with CA, and NV.

      Let CA and NV Buss community pick-up the entitlement costs dumpped upon us by the invasion and the greed.

      Anyone what to comment about the State of Michigan's illegal problem ?

      Send that revenue to the Borders to help quil the murders . To help support the over worked, under staffed Americans working there for our National Security,

      They need our help.

      The clear agenda coming from D.C. leadership ASAP, is giving amenesty to illegals living here and also the unification to families already living here separated from their children ( who are here as non-citizens).

      Obamas will call it ,The Family unification program"

      I can't wait for that price tag to be attached to our failing economy and all the other entitlements that we "the people" have no clue we are paying for currently.

      I want Americn kids an their families to be given the opportunity to have what is rightfully their birth right.

      Their parents to have jobs, their homes not to be foreclosed upon,

      and certainly, the first crack at a decent public education that "we the people" have been speaking about for decades" here in America.


      We could annex MX who''s natural resources are acceptional, who's economy is doing better then ours, allowing all of us to be a "soveneign state of the union."

      In the end it probably be less expensive.

    24. Harvey Ball says:

      I am unsure of you analysis based on what you presented in the article. Specifically you said the TennCare was enacted in 1994 and then over a half a million. You showed crude mortality rates from 1990-1998. It seems like the better method may have been to look at the data from 1995, which is when you could begin to see the effects of the increased. Thanks.

    25. Alex, Washington DC says:

      Every time a government intervenes in the economy for the "good of the people", the effect is much worse than if we let private market forces deal with these issues independently. This should almost always be the "idea" that we come back to when suggesting legislation. I don't understand what's so hard about this. Obama already messed up once with the stimulus bill, and now he's going to mess up even more with this unnecessary and dangerous healthcare legislation.

    26. Billie says:

      Think government of no accountabilities even knows the understanding of the word efficient? How about the understanding of the word, decency. Or how about fair?

      You don't have to think twice to know limited government is a great and efficient idea for a free people.

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    28. David, Tennessee says:

      This article is a bunch of bullcrap. It gives no credible alternative to covering the uninsured. As usual, the Heritage Foundation idiots attack the plan and offer no real solutions to add poor and uninsured people. Why? Because they can't come up with a program that doesn't add to the budget and that is a reasonable expectation from someone who can't pay.

      The Constitution is very clear–the common defense is a mandate. Part of that common defense is to have healthy citizens. Healthy citizens need access to doctors and medical services. Seems to straightforward for conservatives to fathom.

      I was on TennCare before being disenrolled in the great purge of 2004. Without TennCare, I would have never been eligible under normal Medicaid rules. Am I healthier now after being without health insurance for 5 years than when I was on TennCare for almost 10 years? The answer is no. Therefore, the whole conclusion and logic of this article is flawed. I am not better off without TennCare than when I was in TennCare.

    29. The Poor says:

      Full Name: Wayne Berman Title: Vice-Chair; Finance Co-Chair; Adviser

      Over the course of three years, Berman’s lobbying firm was paid $660,000 to lobby on behalf of UnitedHealth subsidiary Americhoice, a managed care HMO providing health insurance to Medicaid, Medicare, and SCHIP recipients. Specifically, according to the lobbying report, they lobbied on Medicaid issues in the Deficit Reduction Act of 2005.[Americhoice Lobbying Reports 2004 – 2007; Americhoice.com ] Berman Also Lobbied For “Absurdly Low” Rates for Medicaid Managed Care Companies to Pay Out of Network Hospitals. Also included in the DRA, and mentioned as a lobbying issue on Berman’s Americhoice lobbying report, was a provision setting rates managed care companies must pay to out-of-network providers — mainly hospital emergency rooms — for care received by Medicaid beneficiaries. Rather than forcing managed care companies to reimburse out-of-network hospitals an amount comparable to network providers, the legislation set the default amount to the state’s “fee-for-service rate,” which often is “absurdly low.” The provision thereby shifted financial responsibility for services to Medicaid beneficiaries from the managed care companies to the hospitals themselves, permitting managed care companies to rake in huge profits, while hospitals incurred added losses.[Modern Healthcare, 1/29/07; Text of S. 1932] To Save Money, Bill Cut Services to Medicaid Beneficiaries, But Left Managed Care Providers Untouched. Under the final budget package, substantial Medicaid spending cuts were achieved by imposing new premiums and increased co-payments on Medicaid beneficiaries; some costs were also shifted to the states, who in return were awarded new powers to drop coverage or reduce benefits to certain beneficiaries. In a letter to Senate Majority Leader Bill Frist, the AARP CEO decried the final bill, saying it “protects the pharmaceutical industry, the managed-care industry and other providers at the expense of low-income Medicaid beneficiaries.”[Inside CMS, 12/29/05; Los Angeles Times, 12/22/05; World Markets Analysis, 12/21/05; The Hill, 12/20/05]

      The Players and whats up for grabs. Profits United Health Group 2010 $4.293 billion

      Here are some other 2010 budget numbers: Wonder what it cost CMS ( Can't Manage Sxxx) to operate each year.$453 billion Medicare///$290 billion Medicaid ///$78.7 billion Department of Health and Human Services/// UnitedHealth Group Awarded TRICARE Managed Care Support Contract … Jul 13, 2009 … UnitedHealth Group Awarded TRICARE Managed Care Support Contract for more than $20.3 billion. BILLIONS awarded and still to be awarded United's AmeriChoice unit is the largest government contractor administering state Medicaid programs for the poor and federally sponsored plans for children. AmeriChoice's revenue rose 34% last year, to $6 billion. United Health Group and its subsidiarys must be exhausted from signing Corporate Integrity agreements each and every year and as reward for their violations well what happens? they are awarded more contracts and more money and maybe even an ambassadorship here and there and if anybody should question what the heck is going on, then send them a Elmo doll.(Americhoice sponsors Sesame Street) Up side, Billions to be made, down side pay some fines (cost of doing business) move on and nobody goes to jail or gets excluded from the game. Get up the next day put on your Elmo costume and its back to work as usual. WOW, even in the Casino world or Mob world this would be a no no, suprised Hollywood has not done a movie on this or maybe even great TV.

    30. rudy says:

      AmeriChoice is proud to collaborate with Mayor Nutter’s administration for the second consecutive year to help overcome the obstacles that could have resulted in the City closing its pools this summer,said Executive Director of Pennsylvania East AmeriChoice Ernie Monfiletto.Following the check presentation, AmeriChoice was presented with a health care Innovation Award by the National Association of Health Services Executives in recognition of its services to its Medicaid and Children’s Health Insurance (CHIP)members.

      2009 and 2010 $120,000 blatant inducements from your tax dollars for the protected Medicaid vendor. Philadelphia PA Mayor Nutter received two years in a row $60,000 checks to help keep open and operate the city swimming pools. These checks came from AmeriChoice Health and on the surface seems like fine gifts.Yet, they are Bribes non the less, these checks come from a company who receives all its money from the Federal Government as a vendor for Medicare Medicaid services is not allowed to offer bribes kickbacks and money gifts of any kind inducements in order to promote its share of the market place. This is not allowed as a use of your taxpayers dollars yet it happens.What will it really cost the City of Philadelphia to receive this money? Americhoice Health has a long history of corruption over the years yet seems to be protected by those who are responsible to over see their actions why is that? Inducement. Section 1128A(a)(5) of the Act bars the offering of remuneration to Medicare or Medicaid beneficiaries where the person offering the remuneration knows or should know that the remuneration is likely to influence the beneficiary to order or receive items or services from a particular provider. The "should know" standard is met if a provider acts with deliberate ignorance or reckless disregard. No proof of specific intent is required.

      Among its provisions, the anti-kickback statute penalizes anyone who knowingly and willfully solicits, receives, offers or pays remuneration in cash or in kind to induce, or in return for: A. Referring an individual to a person for the furnishing, or arranging for the furnishing, of any item or service payable under the Medicare or Medicaid program; or B. Purchasing, leasing or ordering , or arranging for or recommending purchasing, leasing or ordering, any goods, facility, service or item payable under the Medicare or Medicaid program. Violators are subject to criminal penalties, or exclusion from participation in the Medicare and Medicaid rograms, or both. A violation of the anti-kickback law is a felony offense that carries criminal fines of up to $25,000 per violation, imprisonment for up to five years and exclusion from government health care programs.The federal anti-kickback statute, 42 U.S.C.§ 1320a-7b(b), prohibits individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid or any other federally funded program. For purposes of the anti-kickback statute, "remuneration" includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in-kind

      If this were any one person they would be in jail now, if the FBI were called in on this matter they would be in jail now, if the IRS were notified they would be in jail now. Since all Ameri-Choice checks come from the United Health's home office they should be held equally responsible for any bribes, kickbacks, Stark, Fraud and inducements violations that have occured. Federal and State Governments have developed such a depended position with this company that laws and rules no longer apply. This role is nothing new for AmeriChoice Health, its been going on for years, look at some of the prior news articles that date back for years only now they can afford to hire the best of Law firms and give the most for Political contributations all on the back of the taxpayer.

    31. Medicaid Pot Benefic says:

      14,000 New Yorkers double-dip into 'Medicaid Pot" BY Kenneth Lovett DAILY NEWS ALBANY BUREAU CHIEF Wednesday, March 4th 2009, 12:14 AM ALBANY – Nearly 14,000 Medicaid recipients in New York City are double-dipping in other states, a new report found. Florida, Puerto Rico and New Jersey had the most Medicaid recipients also enrolled in New York, an audit by state Controller Thomas DiNapoli's office revealed. The dual enrollments cost the federal, state and city governments a combined $23.5 million in Medicaid claims from April 2004 through May 2008, the audit found. While some of the claims were legitimate, DiNapoli suspects many were not. In some cases, people may have illegally used the Medicaid program in each state they were enrolled. In others, New York's more generous program might have covered costs that should have been paid for by other states, DiNapoli said. The city Human Resources Administration has not completed investigations of $11.1 million in possible inappropriate Medicaid managed care premium payments, the audit found. While the enrollees may have been getting services they were not entitled to in New York, the medical providers got the money, DiNapoli said. "The state is facing the worst fiscal crisis of our lifetime," DiNapoli said. "We can't afford to waste millions of dollars on people who don't live here." The controller said the state Department of Health

      Election Year Medicaid Medicare Inducement issues left open for November not openly discussed.Politics have gone from heated to man on fire thoughts. Also the Judicial dilemmas, since all are offically allowed to bear arms again, the big city Mayors are concerned about how the poor will be able to rearm themselves, and are looking for some type of financial relief from Federal State Medicaid programs to maintain their status quo.The higher courts face tough issues this term since making honest fraud legal, there agenda now turns toward making honest kickbacks and honest bribes equally as legal. This topic remains high as a shared issue by the medicaid medicare enrollment providers since they are looking to expand inducements past the complicated pregnancy stage.

      The DOJ has serious concerns that if legalized marijuana in California for medical reasons could be used as a inducement or inticement to help secure new enrollments for the Federal State Medicare Medicaid programs.The State of California is concerned that if the Feds step up their effort in killing off the marijuana crops it could cause higher tax problems that effect Medicaid currently under consideration by the State 'marijuana tax control board'. Limo drivers cancel their planned Medicaid Cuts DC rally and leave for California to protect this years crop. Wow, don't think I would like to be in Politics for this years elections. Govenor Schwarzenegger indicated that if the Tea Partys membership keeps holding their rallies at our Marijuana burning fields they will have to be taxed for their free use of inhalants, prior to having them bused back to Arizona. Senator Mccain wants the deportation of illegal Mexicans to stop immediatley claims their State has gone to POT and insists California return his landscapers at once.

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