Medicaid Myth-Perpetuation, on Your Dime

Source: “The Impact of the American Health Care Act on New Mexico Medicaid and the New Mexico Economy”

Another taxpayer-subsidized economist has produced an analysis concluding that Medicaid expansion in New Mexico has been just nifty.

Kelly O’Donnell was once the research director of the far-left advocacy group New Mexico Voices for Children, and later worked for Bill Richardson’s administration. (In 2010, she told the Albuquerque Journal that she liked to “compose dirty haiku while driving.”) Now she’s a research professor with UNM’s Robert Wood Johnson Foundation Center for Health Policy. Last week, she released “The Impact of the American Health Care Act on New Mexico Medicaid and the New Mexico Economy.” The eight-page “study” paints an apocalyptic scenario, warning that under an Obamacare repeal, if the state ditches its expansion of Medicaid and “loses federal funding from per capita caps,” the Land of Enchantment “would lose $11.4 billion in federal revenue, compromising 31,800 jobs, $1.6 billion in wages and salaries and $759 million in state revenues by 2026.” Stuffed with faulty assumptions and egregious omissions, the document is another example of why the state’s stable of government-university “scholars” desperately needs some ideological diversity.

As is always the case with left-wing promotion of government healthcare, O’Donnell uses words such as “coverage” and “insure” in relation to Medicaid. It’s a serious, and credibility-crushing, error. Calling Medicaid “insurance” doesn’t make it so. Medicaid is welfare, and thus, operates very differently than a policy an individual or employer purchases from Molina, Aetna, or Humana. The program’s health “benefits” are vastly overstated by its enthusiasts. And while O’Donnell, predictably, claims that expansion addresses the uncompensated-care problem, she does not admit that subsidies are subsidies — either way, taxpayers are on the hook.

Her economic-development argument for Medicaid expansion is equally weak. Healthcare employment has been rising in the U.S., and New Mexico, for decades. (As the U.S. Bureau of Labor Statistics noted a quarter-century ago, the “indispensable nature of its services, the steady pressure of demographic change, and the means by which health care is purchased, account for [the] industry’s unusually strong employment growth.”) Contrary to O’Donnell’s assertion, no analysis has been able to decisively demonstrate that continuing employment gains in healthcare are due to Medicaid expansion.

Finally, O’Donnell fails to note that Washington is broke, with $19.8 trillion in publicly held and intragovernmental debt and much, much more in unfunded liabilities. Fiscal reality will eventually induce sweeping cutbacks to entitlement programs. New Mexico would be wise to get ahead of the inevitable, and start transitioning to bolder, better healthcare policy today.

Finding the best reforms for a broken, unsustainable system, not propping up false notions about the “multiplier effect” and perpetual aid from Washington, should be subsidized academics’ priority. Taxpayers deserve it.