The Oklahoma Policy Institute, which advocates for government programs and increased taxpayer funding, includes a lot of useful data and detailed analysis in its communications outreach. This doesn’t, however, mean that OK Policy always has the right message.
Its officials argue that Medicaid expansion is worthwhile because they find the current system relatively inexpensive. But Oklahoma’s Medicaid program currently covers low-income children and pregnant women, seniors and persons with disabilities. The proposed expansion would add about 180,000 people, potentially including many with serious, long-term health problems. You can’t extrapolate the cost of covering a demographically broader (and potentially sicker) population by examining the costs of covering a dissimilar and narrowly tailored group.
Furthermore, in an issue briefing, OK Policy notes that Medicaid costs “have risen at a more modest pace than total health expenditures or premiums for employer-sponsored coverage” and that per capita costs for Medicaid patients “are significantly below” those for patients covered by private insurance.
But a significant reason for the difference in growth rates is that private insurance absorbs cost-shifting created by Medicaid. The market rate paid by private insurers is often up to 140 percent of Medicare rates, which means Medicare rates are unrealistically low. And Medicaid rates are even lower. In Oklahoma, OK Policy notes, Medicaid rates are 96.5 percent of Medicare rates. This points to significant cost-shifting to those with private insurance or paying out of pocket.
Trumpeting the fact that Medicaid’s costs are rising more slowly than private insurance is like bragging that your electric bill is lower when you’ve got an extension cord plugged into your neighbor’s outlet.