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The States Should Say No

. . . to ‘free money’ for Medicaid expansion.

Dec 24, 2012, Vol. 18, No. 15 • By ANDREW B. WILSON
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In my home state of Missouri, the leaders in both houses of the legislature (with large Republican majorities) say they are prepared to disregard the governor’s wishes by refusing to participate in the Medicaid expansion and refusing to set up state insurance exchanges.

Medicaid should be reformed, not expanded. Medicaid costs have been the fastest-growing part of state budgets for more than a decade. In Missouri, Medicaid expenditures jumped from $3.4 billion, or 22 percent of the state’s total expenditures in fiscal 2000, to $8.2 billion, or 36 percent, in fiscal 2012. Despite the increased outlays, complaints are growing on the part of patients and doctors. Poor patients often have a hard time finding doctors. And doctors say they have little incentive to stay in the program because of reduced reimbursement rates and administrative headaches.

The states should explore better ways of providing catastrophic health insurance for those without coverage. And they should be smart enough to know that the offer of “free money” usually means a one-way ticket to financial ruin.

Andrew B. Wilson is a resident fellow and senior writer at the Show-Me Institute, which promotes market solutions for public policy in Missouri.

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