Study finds Medicaid expansion increases emergency room costs

ALBANY HERALD EDITORIAL: A selling point of the Affordable Care Act looks more like an unexpected liability

Politicians, at least if they’re honest, will tell you that the biggest problem with legislation is unintended consequences.

It’s worse when evidence arises that shows that one of the legislation’s biggest selling points turns out to be the opposite of what happens.

And that may be what we’re running into as the Affordable Care Act continues to be implemented.

President Barack Obama’s signature domestic legislation is off to a rocky start as federal officials work the kinks out of a flawed registration system. So far, the number of Americans who have obtained new coverage under Obamacare pale in comparison with the number of Americans who had their coverage pulled out from under them by the act. There are also concerns about the security of the system and its ability to protect the privacy of the information required of those who sign up.

But an even more unsettling development came to light last week when one of the biggest selling points of the part of the program that expands Medicaid coverage turns out to not be the case in the only real sampling of its implementation. Proponents of expanding Medicaid coverage argued that it would lessen the stress on hospital emergency rooms because the newly covered individuals would use primary health care instead.

It appears the effect is just the opposite.

A study published Thursday in the journal Science found that emergency room use by Medicaid patients increased by 40 percent, which some experts think could increase emergency room spending at U.S. hospitals by $500 million a year rather than reduce it.

The study by the non-partisan National Bureau of Economic Research of Cambridge, Mass., examined a randomly picked group of 25,000 low-income adults in the Portland, Ore., area over an 18-month period. Oregon had randomly chosen low-income residents to receive Medicaid insurance coverage. In the study group, just over 9,600 were added to the Medicaid rolls and just over 15,000 patients were used as the control group. The study’s authors found that Medicaid hikes annual spending at emergency rooms by about $120 per covered individual.

So, what does that mean?

With the administration’s estimate that 8.7 million people will be added to Medicaid in the United States this year, it means that federal taxpayers will shoulder much of the initial cost for the 26 states that went along with the Affordable Care Act and expanded their Medicaid coverage. But while the federal government is picking up that tab at first, that federal support will decrease and those states — and their taxpayers — will have to pick up a sizable tab in the not-too-distant future.

Georgia didn’t expand its Medicaid program, though there is a growing political effort in the state calling for it to happen.

Unlike the federal government which can spend itself into a sea of red ink, Georgia is required to balance its budget each year. This study shows that the Medicaid expansion portion of the Affordable Care Act is not functioning as advertised and once the federal support dwindles, money from other state-funded programs would have to be redirected to Medicaid or state taxes and fees would have to go up to cover the significant additional cost.

The climate under the Gold Dome isn’t likely to change in the coming session, and in this case that is probably the best avenue of approach. The Affordable Care Act is flawed and first needs to be fixed by the federal lawmakers and the administration who created it before Georgia considers any Medicaid expansion.

The Albany Herald Editorial Board