John Locke Update / Research Newsletter (Archive)

Medicaid expansion will crowd ERs futher

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"[T]his law reduces the hidden tax of about $1,000 for family coverage that those with insurance pay to cover the cost of the uninsured who rely on emergency rooms for care."
— Gary Locke, Secretary of Commerce, April 1, 2010

"You and I are both paying 900 bucks … in higher premiums because of uncompensated care."
— President Barack Obama, September 20, 2009

Health care reform was supposed to end trips to the emergency rooms for everyday care. That would save families $1,000 a year on their health insurance premiums — part of the $2,500 premium reduction President Obama promised as a result of health care reform. There are problems with this argument and with health care reform’s solution of putting more people on Medicaid.

1. The 3 percent solution. Most estimates put the cost of uncompensated care around 3 percent of health care costs.

2. Medicaid recipients are more likely to use the ER. The uninsured were about as likely to visit an emergency room as those with private insurance. Medicaid recipients were about 50 percent more likely to use an ER for care. They were also twice as likely as the uninsured to visit an ER two or more times a year. 

3. Medicaid recipients are using ERs more. New research published in the Journal of the American Medical Association found that "visits among people receiving Medicaid went from about 694 visits per 1,000 people to about 947 visits per 1,000 people, while visits by adults with private insurance, no insurance or Medicare remained stable."

4. ER costs and waits will likely increase after reform. In Massachusetts, emergency room visits climbed 9 percent between 2004 and 2008, despite passage and implementation of RomneyCare, the policy progenitor of ObamaCare. Between 2005 and 2007, ER costs climbed 17 percent. Nationally, there is already a shortage of primary care physicians, and the number of emergency departments is falling, so even more people could end up in emergency rooms, and the waits could increase further.

5. Alternatives needed. Increasing the number of nurse practitioners, physician assistants and other non-doctor professionals would increase the number of care options outside the emergency room and reduce health care costs in every setting. This may be an unintended deregulatory consequence of health care reform as states seek ways to ease their own burdens.

As Senior Fellow, Joe examines fiscal and tax policy. He previously headed the North Carolina Government Efficiency and Reform initiative within the Office of State Budget and Management, which led to changes in automotive fleet management, natural and… ...

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