No surprise - real economists laugh at GOP hacks, find savings in Medicaid expansion

You might recall an “analysis” that was released by the Bradley Foundation’s WILL front group and Koched-up UW professor Noah Williams that tried to claim Medicaid expansion in Wisconsin was a bad idea because it would raise costs and premiums for private insurance. Given the authors, it was laughable enough (Will Flanders of WILL and Noah Williams are both GOP hacks), but myself and others much smarter than me looked at the basis of the “study” and saw it to be flawed, cherry-picked BS.

Sure enough, two legitimate UW economics professors looked at the Williams and Flanders study, ran the numbers themselves, and came to a very different conclusion.

It found the move could save $19 million to $103 million — the mid-range savings estimate is $65 million — by reducing uncompensated care. The study was released by Gwyn Pauley and Matt Wiswall of the UW-Madison Department of Economics.

You can read the whole thing here, but let me give you this part of the executive summary.

In this report, we evaluate the evidence on the costs of the Medicaid expansion for Wisconsin. Our report has two parts. First, we use data on health spending and insurance rates to compute the potential costs and savings of the Medicaid expansion in Wisconsin. Unlike Flanders and Williams, we include the potential savings to health care providers from the Medicaid expansion covering the uninsured, individuals who might otherwise receive free or “charity” care or simply not pay their bills. In a recent report, the cost of this “uncompensated care” in Wisconsin was estimated to be $1.1 billion, provided either as charity care ($553.4 million) or as uncollected bills or “bad debt” ($583.4 million) (Wisconsin Hospital Association Information Center). Recent studies of the states who have expanded Medicaid have concluded that states that expanded Medicaid experienced large decreases in uncompensated care relative to states that did not expand (Dranove et al., 2016). The Medicaid expansion has saved $5.7 billion in uncompensated care costs in the year 2014 alone (DeLeire et al., 2014), helping improve the bottom line of health care providers, particularly smaller rural hospitals (Schubel and Broaddus, 2018). Instead of costing private health insurance consumers in Wisconsin, we might expect the Medicaid expansion would actually reduce their costs.

And not only do the real economists at the UW say that Medicaid expansion would likely reduce costs in Wisconsin, they call out Flanders and Williams for leaving out variables that anyone honest would have included – notably that medical costs are rising everywhere, regardless of Medicaid expansion.

Column 1 of Table 5 exactly replicates the Flanders and Williams estimate, indicating that Medicaid expansion would increase per insuree private health costs by $177.13 Column 2 adds calendar year effects, to control for the steep increase in nominal health costs. With this addition, the estimated effect of the Medicaid expansion falls to $67, and is no longer statistically significantly different from zero at the 10 percent level (p-value of 0.316).

Finally, Column 3 of Table 5 adds state level time trends, and the effect of the Medicaid expansion is now negative at -$84, with a p-value of 0.104, suggesting the expansion produced a savings. The regression in Column 3 is the most general and robust because it controls for state level trends in health spending, due to state level trends in the population characteristics affecting the demand for insurance or state level trends in other health policy reforms occurring in this period. The effect of the Medicaid expansion in this analysis is identified from any deviation at the state level in their trend. That is, we are analyzing how state level spending changes as Medicaid is introduced. The conclusion from this analysis is that the Medicaid expansion is associated with a reduction in private health care costs. We emphasize that this is an association, and are reluctant, due to the caveats mentioned above, to believe that this result, like any of these regression results, are necessarily causal.

It is clear that the Flanders and Williams results do not hold up in standard models controlling for time trends. In addition, limiting the analysis to years around the Medicaid expansion dates (see Appendix Table A-3) also reveals no statistically significant relationship. Further analysis indicates that if Flanders and Williams would have included a simple linear year trend (instead of a set of year fixed effects as above), their findings would also not hold up (see Appendix Table A-4). Controlling for time trends is not only standard in econometric research but also necessary in this context. Health care costs are rising rapidly (especially in nominal terms as used by Flanders and Williams) for any number of reasons, many of which cannot be attributed to the Medicaid expansion. Failing to account for these time trends would misleadingly associate any recent government policy change–whether actually related to health care or not–with an increase in costs.

Now that the Bradley Foundation study is proven to be fraudulent flawed and that this will be a better deal for both taxpayers and hospitals, is Assembly Speaker Robbin’ Vos going to reconsider his opposition to Medicaid expansion. OF COURSE NOT!

"Sometimes you have to lead by what you believe in and not just follow public polling," Vos said.

Especially when you believe in serving donors and other right-wing oligarchs over the everyday Wisconsinite, right Robbin’?

At least you're a transparent crook.

And check out this bit of absurd pretzel logic that Robbin’ tries to sell as to why the status quo is better for taxpayers.

Vos said Wednesday he hadn't read the new study. He said the focus should be on helping the uninsured sign up for private insurance on the Affordable Care Act exchange, which is subsidized solely by the federal government.

For Medicaid expansion, the federal government pays at least 90 percent of the cost, with the state picking up 10 percent, instead of the regular Medicaid arrangement of 60 percent federal and 40 percent state.

"You do not need to have them on Medicaid, which is partially state funded," Vos said. "I do not want to create any increased liability for state taxpayers when we have the option to have the burden entirely fall on the federal government."

So now Robbin’ wants people in the barely-above poverty level to get their insurance from the “failing” ACA exchanges because the state pays nothing on tax credits that people get to offset the cost of coverage. But Vos also wants the state to pay AN EXTRA 30% OF THE COST for everyone in poverty that is currently on Medicaid?

That’s quite a losing proposition there Robbin’. That’s why Medicaid expansion would save state taxpayers around $160 million a year compared to the status quo, according to the Governor’s budget (a number that has generally been backed up by the Legislative Fiscal Bureau over the years).

You know, I used to think Robbin’ was just saying stupid things to try to trick the low-info rubes that still buy into GOP BS, and really knew what he was peddling was garbage. Now, I’m wondering if he really is this dumb.

And you really have to be dumb and/or bought-off to oppose Medicaid expansion in Wisconsin at this point. Time for Dems to press the advantage.