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.