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Expanding Medicaid raises many questions, provides few answers

For 12 years, when the phone call comes in the middle of the night, I respond to provide orthopedic care, to the very best of my ability, to every patient. Those with swastika tattoos, those who are abusive and under the influence of drugs get the same care as those who are “gentle and sweet.”  Similarly, a patient’s insurance status does not impact how I treat him.

I believe that we must have a sustainable safety net to provide additional assistance to Arizonans who need extra help. But, in researching the recent passage of an expansion of Medicaid in our state, I now have more questions than answers.

What if expanding Medicaid meant more people losing private coverage and ending up on taxpayer funded, government-run health insurance? Liberal economist Austin Frakt co-wrote a paper in 2011 that suggests up to 80 percent of all new enrollees in Medicaid will come from the ranks of the currently privately insured. An earlier study by MIT professor and “Romneycare” and “Obamacare” architect Jonathan Gruber estimated a number nearly as high. This concept, known as “crowd out,” was not even referenced in the materials the proponents of expansion spread throughout the Capitol.

How will this loss of private coverage for Medicaid impact hospitals? A 2013 study funded by the Arizona Health Care Cost Containment System and conducted by the independent actuarial firm Milliman reports that Medicaid payments to Arizona’s private hospitals are, at best, only 70 percent of the amount paid by Medicare. Since private insurance pays a varying, but substantial amount above Medicare, expanding Medicaid means that for up to four out of five patients, hospitals could be receiving nearly 50 percent less than they do today. Private businesses will suffer an even bigger burden of cost sharing. Again, I found no mention of this anywhere in expansion supporters’ literature.

Hospitals correctly noted that freezing enrollment for the population of adults below the poverty line made a noticeable dent in their bottom line. As an orthopedic surgeon who treats many fractures, I saw an impact, since younger adults who fit this category make up a real percentage of my patients. But “restoring” that population and expanding Medicaid well beyond this are two very different things. No plan was offered to tax hospitals to get additional federal dollars to fund this restoration.

Instead, the plan offered, and supported by nearly all of the hospitals, was to accept a tax only if the full expansion was passed. Which brings me to my next question: Was the passage of Medicaid even constitutional?  A tax — which is how it is referred to in all federal documents, including President Obama’s preferred budget plans — requires a two-thirds vote of the Arizona House and Senate to pass. A bipartisan vote by

70 percent of Arizonans placed this protection in the state Constitution 20 years ago. Despite dismissive bluster, all sides do recognize that the size and scope of the tax — whose value is measured in the billions to the state treasury — is unprecedented. Arizona Medicaid expansion passed by a vote of 33-27 in the House and 18-11 in the Senate, far short of a two-thirds majority.

A lawsuit has been filed and the state courts will determine if the law fits into the same narrow exception allowing state parks to raise parking fees by $1.

Establishing a sustainable safety net is something we can all agree upon. In 25 years of caring for patients, I have always tried to put them first. But this Medicaid expansion raises more questions than answers. Now, away from the intense heat of the legislative session, members of both parties, on all sides, ought to be taking the time to get answers, and honestly look at alternatives if, and quite possibly, when, the courts find the politics of expansion, unconstitutional.

Dr. Eric Novack is a Phoenix-based, board certified orthopedic surgeon and health care policy expert.

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