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Wednesday, May 23, 2018
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The devil in the Medicaid-expansion details

Speaking, as we recently were, about perverse incentives fostered by the Affordable Care Act/Obamacare, here’s another from the stunning Congressional Budget Office report that dropped Tuesday:

“Taking that research [by independent economists] into account, CBO estimates that expanded Medicaid eligibility under the ACA will, on balance, reduce incentives to work.”

Elaborating on the CBO’s finding, a team of academic economists led by Texas A&M’s Laura Dague reported chillingly last March:

“We find enrollment into public insurance leads to sizable and statistically meaningful reductions in the probability of employment up to at least 9 quarters later, though the estimated size of this reduction varies from 0.9 to 10.6 percentage points depending upon the model used. In light of these results, policymakers should be prepared for a reduction in labor supply among those affected by the Medicaid expansion to childless adults under the Affordable Care Act.”

Keep in mind, those most likely to be affected expansions of Medicaid (in those 25 or so states that have welcomed it, unlike Florida) are younger adults who, as noted above, do not have children. In other words, they are responsible only for themselves. What economists have been saying, and the CBO now confirms, is Medicaid expansion encourages those people to drop out of the labor force, increasing their dependence on other forms of government support.

This tendency will be worth keeping in mind when the push for Medicaid expansion returns to the Florida Legislature next month, and House Speaker Will Weatherford (R-Wesley Chapel) again rallies the Republican majority to resist.