Medicaid Expansion

Moderated by Rick Badie

State officials opposed expanding Medicaid when widening the health program became an option last summer. Today, a college professor calls that an unwise move economically, while a conservative political advocate considers it fiscally prudent.

Expansion helps economy

By William S. Custer

Just under half the states, including Georgia, will decline to expand Medicaid under the Affordable Care Act in 2014. It is likely, however, that a majority of those states will eventually opt into Medicaid expansion. The return on investment of expansion to state taxpayers is too great to ignore.

In Georgia, the cost of care for the uninsured is well over $2 billion annually. That care is paid for by state and local tax payers, consumers of health care services and consumers of health insurance. That care is often given in the most expensive places (emergency rooms) and at the most expensive time (late in an episode of illness). Expanding access to insurance coverage reduces emergency room visits and hospitalizations.

If Georgia chooses not to expand Medicaid, more than 1.6 million residents will lack health insurance coverage in 2014. Taxpayers will continue to bear the costs of care for Georgia’s uninsured, while their federal tax dollars will help reduce those costs for taxpayers in states that expand their Medicaid programs.

The federal money Medicaid expansion would draw into Georgia would generate new economic activity, increase employment, create income and increase state and local tax revenue. The federal government pays 100 percent of the cost of care for Medicaid expansion in the first three years; the state share for those three years is simply increased administrative costs.

That new federal money, net of Federal taxes paid by Georgians, would amount to more than $40 billion over a decade. It’s estimated that as many as 70,000 new jobs would be created in Georgia as a result of Medicaid expansion. The range depends on the actual costs of care for newly insured Georgians.

There would be an increase in state revenue and a reduction in state spending on a host of programs that would offset state costs of Medicaid expansion. Medicaid expansion would replace behavioral health costs paid by the state, decrease criminal justice costs, decrease state public health costs and increase direct revenue from assessments on health care providers.

Failure to expand Medicaid puts employers in the state at greater risk. Not only will they have a less healthy, less productive workforce, they are more likely to face a tax penalty if they do not offer affordable health insurance to their employees.

Under the Affordable Care Act, employers who have workers eligible for a subsidy in the exchange pay a “shared responsibility” tax. Without Medicaid expansion, more workers would be eligible. Jackson Hewitt estimates that those costs to employers could range from $71 million to more than $107 million if Georgia does not expand Medicaid.

Expanding Medicaid would also increase access to care for all Georgians. Many parts of Georgia have been identified as medical workforce shortage areas. Those mostly rural areas lack the resources to attract and retain physicians and other health care providers. Medicaid expansion increases the resources available to attract physicians and other medical workers.

William S. Custer is director of the Center for Health Services at Georgia State University.

Medicaid expansion not the solution

By Virginia Galloway

If someone asked you to buy something that indebted you indefinitely but offered to pay for the first three years with money from your other pocket, would you take it? If a government program made you 13 percent more likely to die, would you sign up? Would you expand the program? Amazingly, some organizations think Georgia should do just that by expanding Medicaid.

President Barack Obama’s health care law required states to expand Medicaid to cover individuals below 138percent of the federal poverty line or lose all federal funds for the program. The Supreme Court ruled last summer that he had unconstitutionally offered the states an offer they couldn’t refuse. Since Medicaid spending typically accounts for a quarter of a state’s budget – 24 percent in Georgia — the Supreme Court ruled the government effectively left states no option but expansion. States now have the choice of expanding Medicaid without losing federal Medicaid funding. Still, Georgia should reject expansion.

Georgia would get those “free” federal dollars to fund the expansion for three years, but the funding levels off at 90 percent in 2022. The federal budget is a disaster. Any economist will note the problem is entitlement spending. Pretending that federal money doesn’t cost Georgia taxpayers is absurd. We pay federal taxes. Georgia’s budget is already hamstrung between education spending and current Medicaid liability, which are made more costly by federal rules and mandates. Medicaid expansion would cost Georgia taxpayers $45 billion from 2013 to 2022, according to the Kaiser Family Foundation.

Medicaid patients are 13 percent more likely to die when undergoing surgery than uninsured individuals, according to the University of Virginia, and 97 percent more likely to die than privately insured patients. Medicaid cancer patients are two to three times more likely to pass away than other patients, according to the journal Cancer. In a recentstudy of Oregon’s expansion program, newly eligible Medicaid patients had no significant health improvement.

The primary sources of Medicaid’s dysfunction are its mountains of red tape and low reimbursement rates. Georgia doctors receive 69 cents for every dollar they spend on a Medicaid patient’s care. According to a poll conducted by Sandra L. Decker of the National Center for Health Statistics, 33 percent of Georgia doctors reject new Medicaid patients.

Some states have wised up to Medicaid’s nightmare and started scheming to receive federal funds without actually enrolling citizens. As Timothy Sweeney of the Georgia Budget & Policy Institute explained recently in The Atlanta Journal-Constitution, “states are finding ways to customize Medicaid coverage under the expansion … like the model developing in Arkansas that will allow the state to use Medicaid dollars to buy private insurance plans for 250,000 people.”

Expansion alternatives like Arkansas’s still don’t address Medicaid’s underlying reimbursement crisis. New Medicaid patients would still have poor options for health insurance and care. Georgia’s most susceptible residents deserve better. For the health of Georgia’s budget and its citizens, Medicaid expansion is not a reasonable solution.

Virginia Galloway is state director of Americans for Prosperity – Georgia.

14 comments Add your comment

Bernie

July 4th, 2013
1:52 pm

Joseph @ 11:45 pm – The copay requirement failed in Georgia as well. We are talking about the Poorest of the Poor Americans. many whose most daily concern is where and when their Next Meal will come.

Yet these God Fearing Christian Republicans, could care less about these Voiceless Citizens of ours. Just recently Georgia Congressman Jack Kingston introduced a BILL to CUT $20 Billion Dollars from the programs that serve our fellow Poorest Brothers and Sisters.

We have Governor Deal, as well standing firm in denying the Medicaid expansion coverage for these same Americans here in Georgia. Coverage with ZERO (0) State responsibility for (3) three years guaranteed by the Federal Government. After year (3) three Georgia would only have a (10%) Ten percent State responsibility.

A simple Math even a CHILD could understand and will say to you “This is a pretty good Deal, if it will help the Poorest citizens of your State.”

How can one possibly and in good conscious, who continually claims to be such a GOOD Faithful God Fearing, Jesus Loving Christian deny Children, Seniors and others after such guarantees?

Such reasoning is typically called backwards “STINKIN THINKING”.

Governor Deal stands PROUDLY in his Denial of the Poor. Such Pride is always remembered at the Pearly Gates. when asked by Saint Peter, what did you DO about the Poorest among You?

On the Day of Judgment, Governor Deal will stand Proudly and with Great Republican Conviction, before Saint Peter and say ” I said, NO!”

Saint Peter will say to Governor Deal, entrance for YOU is “NO!”.

Only Good God Fearing Christians are allowed through these GATES!

Catlady

July 4th, 2013
9:27 am

Seems like I remember Grady trying requiring a copay for meds–maybe $5, and it was shot down because it was “too much.” Do they still charge a $2 copay for meds?

Catlady

July 4th, 2013
9:24 am

Bernie, thanks for mentioning,that. I live well outside the perimeter, where Nc, TN, and GA meet. 75% of the kids in school get free lunch. Most are served by Medicaid or Peachcare. Almost 20% are Latino, virtually all born in the US. They have parents employed at the chicken plant. There is less than 1% African American, although we have perhaps 20 kids in the school system that are biracial or bicultural.

What might help is to charge everyone a nominal fee for use of the emergency room. For Medicaid/Medicare, ,perhaps $20. And, if it is not paid, go after it as the hospital would go after me. However, for visits to the doctor’s office, charge no copay. We need to clear the ER of sore throats and ear infections, which is what I have seen the elderly and poor come in with around here.

Physicians in my area are heavily dependent on Medicare/Medicaid patients. About the only ones around who have traditional insurance are school system employees.

Joseph

July 3rd, 2013
11:45 pm

By “skin in the game” they mean making the indigent pay a minimal copay, just enough to reduce the kind of overuse that Catlady mentioned. Decades ago, Calif. actually tried a $2 copay, and even that minimal amount was a flop. The people simply refused to pay. If the doctors wouldn’t see them, they went to the ER.

Medicaid expansion will increase usage. That is its goal, and since Medicaid only pays 69% of cost, that means higher insurance prices for the rest of us.