Amid the confusion about who won what in the Supreme Court’s Obamacare ruling last month, there was one clear winner: the states.
When Georgia and a couple of dozen other states joined Florida’s lawsuit to overturn the 2010 health-care reform, they were contesting the part of the law that affected their governments: the Medicaid provisions. Obamacare called for expanding Medicaid to cover anyone earning up to 138 percent of the federal poverty level; it aimed to force states to go along with this plan by threatening to withhold current Medicaid funding if they didn’t acquiesce.
The states argued this coercion was unconstitutional, and seven of nine Supreme Court justices agreed with them. Instead of striking down the provision altogether, however, the court offered a remedy: Washington couldn’t take away what it’s now giving states for Medicaid, but states could choose whether to participate in the expansion.
That’s left some governors — including our own Nathan Deal — wondering if they should stay out of the program, or join it to catch the billions of federal dollars that would flow to them. It really isn’t that tough a question. Deal should tell the feds thanks, but no thanks.
First and foremost, Medicaid is already a program of limited effectiveness. Its promise of health care for the poor is somewhat theoretical: In a national survey conducted before the court’s ruling for Alpharetta-based Jackson Healthcare, one in four doctors said they won’t see Medicaid patients, and one in three said they won’t accept new Medicaid patients. In Georgia, 42 percent said they refuse new Medicaid patients.
The reason some Medicaid patients have trouble finding a doctor is the program’s low reimbursement rates, which in some cases are below the cost of providing the care. The expansion to 138 percent of the federal poverty level — from the current 42 percent, or less, for most adults in Georgia — is essentially a gamble that doctors can be duped into thinking they might lose money on each Medicaid patient, but they can make it up in volume.
In the first year, according to state estimates, we would add more than 500,000 people to the 1.8 million Georgians already covered by Medicaid (putting one in four Georgians on Medicaid — and stretching the definition of “safety net”). A likely result is even fewer doctors will accept Medicaid patients, making matters worse for Georgians already in the program.
In what sense is that the “fair” thing to do?
What’s more, the expansion is also a bad gamble for taxpayers.
The salient number here is not $35 billion, which is the estimated amount Washington would chip in toward Georgia’s Medicaid expansion between 2014 and 2023. It’s $4.5 billion, the minimum amount this move would cost Georgia taxpayers in those years.
I say “minimum” because that’s the best-case scenario: It assumes the feds keep their word and fund the expansion fully in the first years, declining to 90 percent of the cost by 2020. Washington already borrows more than a trillion dollars a year, with both Social Security and Medicare due to push Uncle Sam even further in debt, so it’s very possible the federal match will decline further.
If it hits 80 percent, that’s more than $1 billion a year by 2020. If it hits 60 percent, which is the current level, that’s more than $2 billion a year from state coffers. That’s money that can’t go to roads, schools or — pass the smelling salts — taxpayers.
By comparison, Georgia just started a 2013 budget year in which it will spend $19.3 billion in state funds.
Even if state lawmakers were inclined to spend an extra billion or two on health care, they’d be wise to avoid the golden handcuffs of a Medicaid expansion. Take the feds’ money and you have to follow the feds’ rules, forever and ever, amen. Turn it down, and that money could go toward lower-cost catastrophic coverage for the same uninsured, mostly young, adults.
Finally, if Georgia and enough other states turn down the Medicaid expansion, it just might force Congress to make more rational, effective arrangements for the program. Block-granting Medicaid funds to states is one possibility. Another is the grand swap proposed by Sen. Lamar Alexander: Washington takes over Medicaid completely and passes k-12 education totally to the states.
Any way you slice it, the Medicaid expansion was a bad enough deal to push Georgia to fight it in court. Now that we’ve won, let’s accept the victory and move on.
– By Kyle Wingfield