Numbers for Medicaid expansion don’t add up
Obamacare supporters want to talk numbers when it comes to expanding Medicaid in Georgia. OK, let’s talk numbers:
When they returned last month, Georgia’s legislators already faced a $774 million hole for Medicaid through June 2014. That was before any expansion, and even after assuming renewal of the “bed tax” that brings in some $700 million a year for the program.
Medicaid is already the fastest-growing part of Georgia’s budget. Including PeachCare for kids, it will consume $1 of every $7 in state funds in fiscal 2014, up from $1 per $9 a decade ago.
That increased ratio means almost $616 million will go to Medicaid next year instead of transportation, tax cuts, whatever. State lawmakers can do precious little to arrest the trend.
Still, Obamacare supporters want Medicaid to grow faster.
Pressure is mounting on Nathan Deal to follow the path taken by some other Republican governors — Florida’s Rick Scott and New Jersey’s Chris Christie joined the list in the past eight days — and accept the expansion included in Obamacare.
At first, they note, Washington will pick up the tab. Only after three years will the feds begin reducing their share of the expansion, to 90 percent by 2020. How long that rate sticks, I note, will depend on the generosity — or profligacy — of future Congresses.
But today I want to address two other arguments the expansionists are pushing.
Scott made one argument last week when he announced support for expanding in Florida: “[O]ur options are either having Floridians pay to fund this program in other states while denying health care to our citizens,” he said, or taking federal money to expand Medicaid.
The same claim is made here. We’re going to pay for it, so why not benefit from it?
The arrangement might make sense if it were Washington whose budget was balanced and the state whose finances were in shambles, not the other way around.
The notion taxpayers are already funding the Medicaid expansion requires one to ignore the serially large deficits Washington is running — as well as lawmakers’ reluctance to accept the relatively small cuts of sequestration, due to hit Friday.
Spending that rises while huge deficits persist is not “paid for” in any meaningful sense. Scott, Christie and the others are wrong about the responsible course.
And persist deficits will. Just this month, the Congressional Budget Office projected only two years out of the next 11 in which the deficit will be smaller than the very largest deficit (adjusted for inflation) between 1940 and 2008. That’s probably an optimistic take: CBO’s belief the deficit will soon fall to “only” $430 billion in 2015, before rising in each subsequent year, rests on the hope our sluggish economy is about to achieve and maintain a growth rate not seen in a decade and a half.
Speaking of rosy forecasts, another new argument is that expanding Medicaid in Georgia by $4 billion a year over 10 years (the federal share) would create thousands of jobs and boost our economy by more than $8.1 billion a year, a 103 percent return on “investment.”
A review of federal jobs data and state health expenditures makes me skeptical. Using the most recent figures available for both, and adjusting them for inflation, a five-year average for both Georgia and the entire nation showed there was one direct health-care job for roughly every $200,000 spent on health care annually. That $8.1 billion economic boost assumes one direct health-care job would be created for every $110,000 spent.
It’s possible newer jobs would be created more efficiently. But if the earlier average of $200,000 per job held up, and even if we accept the study’s other multipliers, the return on “investment” may be closer to 20 percent — $4 billion in new spending creating $5 billion of activity — than 103 percent. That’s not worth raising state taxes to fund our share of the cost.
The bases for weighing the Medicaid expansion are whether the state can afford its portion, whether we can count on the feds to deliver on their promises, and whether we should expand Medicaid before reforming it. All three answers remain “No.”
– By Kyle Wingfield
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354 comments Add your comment
Stephenson Billings
February 28th, 2013
8:56 am
“And don’t forget the power in numbers in bringing down costs”
To quote Kamchak (as much as I abhor to do so), “The NHS says ‘What?’”
Finn McCool (The System isn't Broken; It's Fixed)
February 28th, 2013
9:02 am
Good story on how much cheaper drones are compared to manned aircraft and the defense contractors who stand to lose billions of our tax dollars.
you could just as easily point out all kinds of things about drones that lean in favor of unmanned craft. Like, uh, death and capture. You bring down an F-35 and a pilot, trained at incredible expense and very hard to replace, is either killed or captured. If he’s dead, your investment is dead too. If he’s alive, he’s a bargaining chip for your enemy and a great candidate to make demoralizing, weepy “Forgive me, peace loving people of wherever I am-land!” videos. No drone has ever made one of those videos. When a drone is brought down, the operator gets up from his chair and has to file a report. Then he moves to the next drone. No loss of trained personnel whatsoever, no casualties, no torture, no risk of political pressure.
http://www.alternet.org/civil-liberties/sleazy-military-contractors-are-crying-foul-over-drones-they-stand-lose-billions
Cherokee
February 28th, 2013
9:02 am
jconservative – that only apples to emergency care, not something like diabetes, or high blood pressure, or any other disease that requires ongoing care.
And I always wonder why requiring everyone to carry some kind of health insurance – in other words, being resposible – is so offensive to conservatives.
Finn McCool (The System isn't Broken; It's Fixed)
February 28th, 2013
9:04 am
What’s up with you people? Will you never learn from your long history of mistakes?
Bingo, we have a winner!
bluecoat
February 28th, 2013
9:04 am
The only way to stop dependency on the Gov.For the Gov. to stop supporting.
Tiberius - pulling the tail of the left AND right when needed
February 28th, 2013
9:05 am
“Those are the only two choices.”
Only in what passes for your joke of a mind, Aynie Sue.
“Will you never learn from your long history of mistakes?”
Cries the person who voted for President Incompetent – twice!
Don't Tread
February 28th, 2013
9:05 am
“Obamacare supporters want Medicaid to grow faster.”
0bama supporters want to abolish personal freedoms and have socialsim, Communism, Fascism, “progressivism” (or whatever benign-sounding term they use these days) to take over.
Tiberius - pulling the tail of the left AND right when needed
February 28th, 2013
9:08 am
“And I always wonder why requiring everyone to carry some kind of health insurance – in other words, being resposible – is so offensive to conservatives.”
Because you don’t understand actual responsibility, Cherokee.
Responsibility is not something that is mandated by government, at least not for the responsible person.
The responsible person does what is responsible IN SPITE of government – not because of it.
Cutty
February 28th, 2013
9:15 am
Kyle and the rest of the peanut gallery didn’t get the memo because they’re still playing politics with Obamacare. Jan Brewer, Chris Christie, Sandoval, Scott and other GOP governors obviously see the benefit of expanding Medicare via ACA.
I trust Christie’s policy decisionmaking more than someone that voted for Newt and Mitt w his gut feelings.
Aesop's Fables and other Lib Economic Theories
February 28th, 2013
9:26 am
What a load of sh*t.
Everything I said is happening right before our very eyes, if you’d like to prove otherwise, be my guest.
Filling your diaper doesn’t show us anything except your immaturity.
bluecoat
February 28th, 2013
9:37 am
Millions to Syria rebels.Millions we do not have.More people on medicaid.Soon all our people will be helpless.Most by choice.A few elected trying to disrupt the country just because they are not happy with the majority vote.The high cost of Iraq,Afgh.wars,we got into by deception,now we will pay forever to get out.Shear the sheep.
Jefferson
February 28th, 2013
9:46 am
The party of stupid is strong here.
bluecoat
February 28th, 2013
9:51 am
I thought Fla.was NJ.
Finn McCool (The System isn't Broken; It's Fixed)
February 28th, 2013
9:51 am
This is what privatization of government duties gets you:
Immigration officials sought out undocumented immigrants to apprehend for minor crimes in order to boost deportation numbers a trove of internal correspondence revealed last week
They boost their numbers and get to take home more of our tax dollars for NOT doing their job. Just great. And you Cons want to privatize what next? Food inspections?
http://www.rollingstone.com/politics/news/the-for-profit-immigration-imprisonment-racket-20130222
Finn McCool (The System isn't Broken; It's Fixed)
February 28th, 2013
9:54 am
Responsibility is not something that is mandated by government, at least not for the responsible person.
So government doesnt care if you commit murder, pee on the sidewalk, walk around naked, pour your poop into the river south of Lake Lanier.
Got it.
Finn McCool (The System isn't Broken; It's Fixed)
February 28th, 2013
9:55 am
Cries the person who voted for President Incompetent – twice -
Aynie Sue voted for W?
Tiberius - pulling the tail of the left AND right when needed
February 28th, 2013
9:58 am
“The party of stupid is strong here.”
You’re right, Jefferson.
Far too many Democrats on this blog.
Tiberius - pulling the tail of the left AND right when needed
February 28th, 2013
9:58 am
“Got it”
Actually, Finn, your response proves that you don’t.
Utterly typical of you, however.
Finn McCool (The System isn't Broken; It's Fixed)
February 28th, 2013
9:59 am
Part of living in a society is that there are rules and norms. Healthcare is meant to protect us from each other. Think of the person with influenza on the airplane or in our schools. The whole purpose is to limit the effects of such situations.
Having sick people get medical attention is an important part of maintaining a functioning society. If Tiberius wants to go live on a deserted island, that’s cool. He won’t have to pay taxes or contribute to any societies. We would all be better off.
southpaw
February 28th, 2013
10:07 am
“The NHS says ‘What?’”
Southpaw says, “Who?”
http://en.wikipedia.org/wiki/NHS
Scooter
February 28th, 2013
10:17 am
How do you talk numbers with people who believed the government could force insurers to cover everyone and lower their premiums?
md
February 28th, 2013
10:20 am
Create jobs? I doubt it very seriously, and even seeing it doing just the opposite:
“President Obama’s former economic advisor, Christina Romer, calculated in a seminal paper published before her stint as CEA chief, that tax increases used to support increased spending (as opposed to deficit reduction) reduce the size of the economy by $2 to $3 for every dollar of new taxes raised. In that case, every new Medicaid-related job actually costs the economy at least 3 to 4 jobs elsewhere (i.e., 1 job that effectively was shifted into the health sector plus another 2-3 lost because the economy shrank as a consequences of the adverse effects of taxes used to bankroll the expansion).”
Add to that the fact that Obamacare only pays for 50% of added administrative costs, which then must come from somewhere else in a balanced budget state or higher taxes………
md
February 28th, 2013
10:23 am
“And I always wonder why requiring everyone to carry some kind of health insurance – in other words, being resposible – is so offensive to conservatives.”
Maybe because Obamacare comes nowhere close to achieving that?
JDW
February 28th, 2013
10:27 am
@Tiberius…”WHO ratings are meaningless, not so independent non-thinker., Already debunked multiple times. Please pay attention.”
Not intended to be a factual statement…like so many from this source. How you coming on that Constitutional budget requirement…found that part yet?
Jefferson
February 28th, 2013
10:32 am
Reasonable people can come to reasonable conclusions under reasonable conditions unless you are a republican
Jefferson
February 28th, 2013
10:33 am
T – check with your hero bobby j who said it, don’t try to rewrite it – he said STUPID.
Jefferson
February 28th, 2013
10:34 am
Just like the boy who said Romney was the WORST person to run against the president.
MarkV
February 28th, 2013
10:46 am
The most remarkable fact about Kyle’s article is that he tacitly attacks the argument people like governors Rick Scott and Chris Christie have made without even trying to refute it. The basic argument is that the people of the state that declines the federal money contribute, through their taxes, to the expansion of Medicaid in those states that accept the money, but their government deprives the people in their own state of those benefits.
What does Kyle substitute for the denial of the above undeniable argument? First, that the federal government has a deficit and likely to have one in the future. Is that a reason for a few states to sacrifice the health of their people? How much will that cure the deficit?
The other argument, even though not discussed in detail in Kyle’s article, is “whether we can count on the feds to deliver on their promises.” That is a particularly silly argument, one for those “what if” arguments one reads on this blog all the time. What if the Chinese want their money back? What if the borrowing results in high inflation? And so on.
Should I drive today? What if I am hit by a drunk driver? Should I walk? What if I get hit by lightning? Should I stay at home? What if it catches fires?
JDW
February 28th, 2013
10:49 am
@Kyle…”The bases for weighing the Medicaid expansion are whether the state can afford its portion, whether we can count on the feds to deliver on their promises, and whether we should expand Medicaid before reforming it. All three answers remain “No.” ”
Sounds a lot like whining to me….lets break it down. Can “the state can afford its portion”?
“A 2011 Urban Institute report estimated that Georgia’s Medicaid program expenditures would increase by only $1.5 billion over 2014-2019.[i] The federal government would spend an extra $21.2 billion for Georgia’s Medicaid program during the period.”
That equates to 2.8% of the Georgia state Medicaid budget…can you really say with a straight face that you are going to turn down $21.2 billion over a 2.8% budget Medicaid budget increase?
Now for this beauty “whether we can count on the feds to deliver on their promises”
Who cares…if they don’t withdraw then.
As for the last “should expand Medicaid before reforming it”
Guess what, we don’t live in a perfect world and sometimes you have to take advantage of the opportunity biting you in the butt. Repugnicans don’t have that choice, aren’t driving that discussion and have no chance to do it in the short term.
So the real answer to the question is the same answer Republican Governor after Republican Governor keep making…get with the program or be prepared for the consequences or at the very least take the advice of your doctor…
“The Georgia chapter of the American College of Physicians believes that it is imperative that the state of Georgia accept the unique opportunity that is now available to use federal dollars to expand Medicaid to everyone who has an income up to 133% of the federal poverty level.”
http://www.acponline.org/about_acp/chapters/ga/ga_medicaid_report.pdf
yuzeyurbrane
February 28th, 2013
11:02 am
Kyle, as I have scolded you many times, stick to political, not economic, analysis. You just can’t cut the mustard there and diminish your thoughtful political insigts, especially re GOP politics. I have read a number of non-partisan analyses of the Medicaid expansion provision, including academic sources, and find their conclusions much more credible than yours. It sounds like you are reading from a list of discredited talking points provided you by Governor Deal’s office. For example, Deal consistently has stated the states share of expansion would be more than $4 billion over 10 years while even the most conservative non-partisan analysis concludes it will be about $2 billion. That is more than a math error. It is a starting point which is a falsehood. Your numbers on the economic multiplier effect also seem to be at significant variance with the numbers from credible analysts. Further, you are a deficit hawk at the Federal level who exhibits little or no understanding how the Federal budget interacts with the economy. And, since you are anti-government (not in any seditious sense), you allow your ideology to cloud your ability to analyze. Most importantly, you seem to have no sense of empathy or any meaningful private market alternative to providing health care for over 600,000 Georgia citizens who are receiving wretched health services under the current system.
Stephenson Billings
February 28th, 2013
11:04 am
Welcome to the “new normal”
Wage Recession Hits 5 Years; Worse Than Jobs Drought
“As bad as the current job recovery has been — and it’s by far the weakest since World War II — the recovery in wages has been far worse.
Five years after the recession began in December 2007, total wages in the economy have yet to fully recover in real terms, Commerce Department data show. In other words, the wage recession continues.
By comparison, the longest previous post-war wage recession, which began with the 2001 downturn, was over in 2-1/2 years, even though that jobs recession lasted four years.”
http://news.investors.com/economy/022813-646108-wage-recession-worse-than-jobs-slump.htm
breckenridge
February 28th, 2013
11:05 am
Currently 40% of all children born in America are born to a parent or parents on Medicaid. It’s time we fiscal conservatives demand a zero tolerance policy on this affront to taxpayers, a policy which combines comprehensive sex education, easily available low cost or no cost birth control and no hassle access to abortion.
Stephenson Billings
February 28th, 2013
11:06 am
Leading like a champ… not….
Republican leaders’ sequester ‘meeting’ with Obama: Seven minutes
“Never let it be said that President Obama has failed to spend time with Republican leaders in seeking an alternative to automatic budget cuts that are due to hit most federal departments Friday. On Wednesday, for example, the president gave GOP lawmakers as much as seven minutes, a rare face-to-face encounter that the White House described as a “meeting.” ”
http://www.washingtontimes.com/news/2013/feb/27/obama-top-lawmakers-will-meet-friday-budget-cuts/
Stephenson Billings
February 28th, 2013
11:09 am
Oh, the humanity!
Federal bonuses are early casualty in sequestration
“The White House budget office has told federal agencies to slow down new hiring, curtail travel and conferences, and to stop doling out bonuses unless absolutely required to by law, according to a new memo released late Wednesday.”
http://www.washingtontimes.com/news/2013/feb/28/federal-bonuses-are-early-casualty-sequestration/
Commonscents
February 28th, 2013
11:11 am
MARKV, JDW, Yuzeyurbrane shhhhhhhh……you’re using common sense analysis(no pun intended to my username) which does not compute in politics. Kyle must continue with the Obama is bad articles! It’s what he’s paid for(because he cannot REALLY believe in the stuff he writes).
md
February 28th, 2013
11:21 am
“The White House budget office has told federal agencies to slow down new hiring, curtail travel and conferences, and to stop doling out bonuses unless absolutely required to by law, according to a new memo released late Wednesday.”
Shouldn’t have to wait for a sequestration to enact simple cost cutting moves. It’s a bit like fraud in Medicare/caid, the misfits can tell us over and over that it exists but it seems to never get taken care of………
md
February 28th, 2013
11:24 am
And I see our resident left leaners continue to overlook the fact that many states are by law balanced budget states…….and the solution to all this added cost is what??
Where do you all propose the cuts be made elsewhere or do you all advocate more taxes on others to pay for it?
independent thinker
February 28th, 2013
11:25 am
If you put aside Kyle’s hysterical rant about further costts of Medicaid and this state’s budget and do a little simple research on how the godfather of Obamacare, Romney and Kennedy got the excess to be absorbed primarily by the feds and private insurers:
“”"”"”"”"”"”"”"”Since the late 1990s, Massachusetts has also received additional Medicaid funds to enroll populations that other states traditionally do not cover. In 2005, when Romney was governor, the federal aid amounted to $550 million. As former Romney adviser John McDonough explains in his book “Inside Health Policy,” the funds were crucial to laying the foundation for universal health coverage. Governor Romney reached out and formed a partnership with Senator Kennedy to scheme how to keep the extra federal dollars coming. At that moment, the state’s mundane desire to retain federal dollars merged with the policy goal of universal coverage to create a new policy imperative. Romney and Kennedy proposed that Massachusetts keep receiving the extra payments and in return the state would shift the use of those dollars [to] subsidies to help lower-income individuals purchase health insurance coverage.”
Ryan Lizza recounts a similar version of events in his New Yorker article on Romneycare. That state ultimately secured three years of additional Medicaid funding, $1.05 billion, which largely financed the Massachusetts expansion. Both accounts suggest that it was a special commitment from the federal government, rather than a capped budget, that spurred Massachusetts’ success.”"”"”"”"”"”"”
Of course most cons like Kyle do not even acknowledge that Romneycare exists, was the basis of Obamacare and that it works.
Typical for the stupid party.
md
February 28th, 2013
11:34 am
Ummm, MA is currently in the process of putting legislative caps on medical spending in order to slow down the freight train that is so successful.
Do you know what that means in a free market? it means folks saying screw you, I’ll go do something else with my time and money if that is all you are going to pay……
http://news.heartland.org/newspaper-article/proposed-caps-massachusetts-doctor-payments-could-lead-shortages
md
February 28th, 2013
11:36 am
“Massachusetts lawmakers have passed first-of-its-kind legislation to limit ever-increasing healthcare costs by aiming to save the state $200 billion during the next 15 years.
Cost-controlling measures within the bill include charging insurers a tax, expected to total $60 million over the next four years, that would be earmarked for a public trust fund covering preventive care and encouraging the creation of accountable care organizations, the New York Times reported.”
A tax on insurers………that is so sad it isn’t even funny. Even sadder is the fact that many consumers won’t have a clue that it is them paying that tax…….
getalife
February 28th, 2013
11:37 am
“‘GROWTH’: 0.1%..”
The gop are job killers..
Stephenson Billings
February 28th, 2013
11:39 am
“Ummm, MA is currently in the process of putting legislative caps on medical spending in order to slow down the freight train that is so successful.”
But, but, according to Finn (and others), increasing the number of insured is supposed to lower costs….
JDW
February 28th, 2013
11:43 am
@md…”the solution to all this added cost is what??”
Well if it bothers you that much lets have a sales tax increase to pay for it…based on our GDP of around $418B annually, assuming it doesn’t grow a dollar we will need to bump sales taxs by 6/10,000 of one percent to handle it. That means that if you spend $1000 at the local mall it will cost you an additional 60 cents….
Now don’t you feel silly?
Stephenson Billings
February 28th, 2013
11:43 am
“WHITE HOUSE THREATENS WOODWARD: ‘YOU WILL REGRET DOING THIS’…”
Obama = thug
md
February 28th, 2013
11:52 am
And what cost are you basing those numbers on jdw? How did you arrive at the cost for the additional 50% increase in administrative costs? I think you are way low on your projections, but I’ll wait for you to give me the costs you are using and we can go from there……
JDW
February 28th, 2013
12:08 pm
@md…look at the prior post…projected state costs are $1.5 billion from 2014 to 2019
Tiberius - pulling the tail of the left AND right
February 28th, 2013
12:10 pm
Responding to JDW’s blather is always a waste of time, but to clear up the error in relying on the WHO ratings for health care, the intelligent know that they use deaths as one of their benchmarks for determining quality of health care – ALL deaths.
Doesn’t matter if they are murders, accidental, suicides – you name it – they all go into their calculations for our life expectancy numbers and therefore skew our overall rating numbers.
In short, they cook the books.
We know it as lying, which makes it all the more astonishing that liberals don’t recognize that which they excel at.
Tiberius - pulling the tail of the left AND right
February 28th, 2013
12:16 pm
And aren’t we all relieved that this administration found that minuscule growth in a disastrous 4th quarter to avoid being tied to another recession on their watch. . .
md
February 28th, 2013
12:17 pm
@md…look at the prior post…projected state costs are $1.5 billion from 2014 to 2019
GA projects program costs of 4.5 billion over ten years, and as I understand it that does not include any additional job costs that will be associated with servicing 700,000 new people, so I don’t think that 1.5 number is anywhere close to being correct.
indigo
February 28th, 2013
12:27 pm
Stephenson Billings – 11:04
The Great Bush Recession is so bad that it will still be many years before we get back to any sense of “normal”.
It’s no accident that so many of us already are declaring George W. to be the worst president in US history.