If you believe in limited government, freedom, free markets, and individual responsibility rather than government intervention, you join me in feeling embarrassed by the histrionics that passes for policy debate among North Carolina’s Left. In today’s Daily Journal, JLF President John Hood, a frequent target of the Left’s insults and nonsense, lays out more facts.
Stymied for now, advocates of Medicaid expansion aren’t giving up – thus the string of insults, illusions, and illogic. I’ll leave the insults alone and discuss some of the rest.
One illusion is that Medicaid expansion would have no effect on rates of private insurance because virtually everyone eligible for the expansion would otherwise be uninsured. The “crowd out” phenomenon in government health insurance has been extensively studied for years. The best evidence suggests that Medicaid expansions involve significant crowding out. In the past, half or more of the tax money spent has supplanted what would have been private spending on medical services, rather than funding new services to the uninsured.
For those new to the issue, the analytical problem lies in assuming that the only way Medicaid crowds out private insurance is by inducing previously insured people to drop their coverage and enter Medicaid. That’s not the only crowd-out mechanism. Keep in mind that health insurance status for low-income people is fluid, not static. A young woman gets pregnant, for example, and goes on Medicaid. After the child is born and past infancy, she gets a job or marries, pushing her income above the Medicaid threshold and perhaps making her eligible for an employer-sponsored plan. Or she then purchases a Blue Cross plan on the individual market. But if Medicaid is expanded, her family might be eligible to stay on the program for free. This is the kind of crowding-out that does not involve a recent stint on private insurance. And it has been common under past Medicaid expansions.