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

Jack ®

February 28th, 2013
5:51 am

Of course liberals want to expand Medicare. No surprise there. More dependency on the government is exactly what they want.

Aynie Sue

February 28th, 2013
5:57 am

Yes, the state can afford to spend a few million in order to get a few hundred million in federal aid. Yes, the feds will deliver on their promise: the federal government can borrow money at nearly 0% interest for whatever Republicans prevent it from raising by tax reform. Yes, we should expand Medicaid immediately and reform it gradually, steadily, and continually, like any other program.

The expansion of Medicaid will create lots of jobs by injecting millions more dollars in the state economy. All the Medicaid funds will be spent and circulated; none will be parked in fancy financial instruments or used to finance corporate mergers, buy-outs, buy-ins, and buy-offs, which eliminate jobs and reduce competition. The additional jobs will create consumer demand for more goods and services, and private capital will be attracted to invest in job-creating enterprises in our state. That’s called growing the economy.

Injecting and circulating money boosts the economy; penny-pinching and pettifogging shrinks the economy and dims the prospect of future prosperity. It’s a matter of simple arithmetic, not opinion. You need not master long division to understand it.

Mr_B

February 28th, 2013
6:33 am

“The notion taxpayers are already funding the Medicaid expansion requires one to ignore the serially large deficits Washington is running ”

I’m sorry, Kyle, but it does no such thing. The idea that liberals are unconcerned about rising deficits, and more to the point,,the rising debt is specious. Those of us on the left just don’t think it’s a good idea to pay off the credit cards by not borrowing the money to replace the roof the tornado blew off.

The long term solution is to completely restructure the way we deliver healthcare so as not to allow expenditures to consume one sixth of our GDP.

Meanwhile, (since even most of your regulars probably would object to folks dying on our sidewalks and that even lower income people will get healthcare of some sort somewhere,) why would you object to getting our Georgia dollars in-state to help those closest to us?

Mr_B

February 28th, 2013
6:36 am

Oh, and if you can show me a mutual fund that returns 20%, I’m all over that baby.

South Georgia Retiree

February 28th, 2013
6:44 am

Yes, we should expand Medicaid in Georgia. Who, or what other source, will help our poorer, uninsured citizens obtain health insurance? This will relieve pressure on emergency rooms and unpaid hospital stays, and at the same time provide a jobs boost for our state. The Governor is negligent if he doesn’t accept this federal help. Regardless of what one thinks of the federal deficit, this is the only way these folks will have any kind of insurance.
We are in a health insurance crisis now because our government and large insurers have procrastinated and didn’t work together for a solution, even though they knew this crisis was looming. This should have been resolved many years ago when our economy was stronger, instead of now, when we’ve hit bottom. Let’s help these uninsured citizens and Georgia’s economy by taking the money and doing some good.

Aesop's Fables and other Lib Economic Theories

February 28th, 2013
6:57 am

The first question is “how will obozocare pay for itself?” Even better, “how many trillions will obozocare add to the deficit.” And then, the next question, “at this point, what does it even matter?” Oops, wrong question. And then, the next question, “since obozo has already defined mediscare as a state pogrom, why would the fed pay even one thin dime for it?”

A Simple Man

February 28th, 2013
7:07 am

Mr. B

“I’m sorry, Kyle, but it does no such thing. The idea that liberals are unconcerned about rising deficits, and more to the point,,the rising debt is specious.”

Doesn’t sound false to me. Every liberal on television says there is no spending problem and refuses to consider even the smallest of cuts. The answer to every problem is a tax hike.

Jefferson

February 28th, 2013
7:18 am

You can go forward, or like GA , go backwards. Those health care needs will not go away, and you will pay more insurance profits and premiums, so go ahead and give your labor to them rather than start on a solution.

Mark your calendar

February 28th, 2013
7:22 am

Medicaid expansion will suddenly make sense for Georgia the morning after election day, November 2014. Conservatives will find a way to rationalize their support for the governor’s new position. The state will lose a few hundred million in the meantime, but so it goes.

USC

February 28th, 2013
7:26 am

I guess Wingfield thinks he understands this financial decision better than the Republican anti-Obama Governors who thought it through, used their best accountants and advisors, coming to the conclusion that only a fool would turn down 100 percent funding for Medicaid. There is still a small group that are willing to sacrifice the healthcare of others and even pay extra to watch them suffer. Sounds sadistic and mean which is how the old Confederacy has always played out (selfish and stupid as well).

Lil' Barry Bailout - OBAMAPHONE!!!

February 28th, 2013
7:27 am

“[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 greedy parasite’s version of “eff you, I’ve got mine”.

Take, take, take.

obiwan

February 28th, 2013
7:29 am

Aynie Sue

Are you on drugs, how is borrowing money to spend good for the economy? Devaluing the dollar is good right? Spending more money than we have is good right? I guess liberals really are that dumb…

Tiberius - pulling the tail of the left AND right when needed

February 28th, 2013
7:29 am

“The long term solution is to completely restructure the way we deliver healthcare so as not to allow expenditures to consume one sixth of our GDP.’

Your party and President Incompetent tried that already, Mr. B.

It has already failed, and you wasted almost 2 years of creating jobs doing it.

Some of us would rather not repeat the mistake at the local level.

Aesop's Fables and other Lib Economic Theories

February 28th, 2013
7:31 am

Over the last few weeks, there has been increased speculation that the sequester would go into effect Friday but be addressed in a March deal to keep the government funded.

Don’t bet on it.

Sen. Richard Burr (R-N.C.), a member of the Finance Committee, predicted sequestration would last through the end of the year.

“Are we going to roll back the size of the cuts? No. I can promise you that,” said Burr. – Duh Hill

Victory! (albeit a minor one.)

Lil' Barry Bailout - OBAMAPHONE!!!

February 28th, 2013
7:34 am

Mr_B: Those of us on the left just don’t think it’s a good idea to pay off the credit cards by not borrowing the money to replace the roof the tornado blew off.
———————–

Those on the left think it’s a good idea to borrow money to buy $27 a gallon biofuels for Navy ships, to spend billions on soon-to-fail solar, battery, and auto companies, and to send fighter jets to the Muslim Brotherhood. Don’t pretend that you pretend to care about the debt. Your messiah is busy increasing it just as fast as he can, and you cheerlead for it.

Thomas Heyward Jr

February 28th, 2013
7:41 am

“Numbers for Medicaid expansion don’t add up.”
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And you’re surprised?
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Ponzi scheme numbers never add up.
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But don’t worry….Nathan Deal will cave.
Republicans ALWAYS do.
They’re just getting their graft/numbers reconciled.
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And remember……..there is still alot of wealth left out there that’s sub-taxed.(booze, cigarettes,gasoline, 401Ks………)
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Kyle better get HOT on “reforming” that Republican party………from within……..while we still have a few pennies left.
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lol

Georgia , The "New Mississippi"

February 28th, 2013
7:42 am

Kyle other states can and will make this work for the benefit of the general population. The elected leaders have higher overall educational levels and can “figure out” how to make it work. What they may lack in education they make up for with a combination of morals and integrity. Georgia voter’s reject these ideas. Every man for himself and God for us all.

independent thinker

February 28th, 2013
7:42 am

Our health care system is totally broken. The pecentage of GDP we pay for health care is not sustainable- more than double other western countries with sane public health care programs. That is why World Health Organization rated US no 37 in health care.
Just read this week’s Time Magazine and see the mega profits hospitals are making off paying patients whose costs are not controlled by Medicaid and Medicare. VA and Medicare actually pay true costs of services.
Of course when someone passes a joke of socialized health care requiring an unfunded mandate for treatment of anyone who is breathing and shows up for treatment in an emergency room, you get such disproportionate cost shifting.

Aesop's Fables and other Lib Economic Theories

February 28th, 2013
7:49 am

Aynie Sue

Are you on drugs, how is borrowing money to spend good for the economy? Devaluing the dollar is good right? Spending more money than we have is good right? I guess liberals really are that dumb

These liberals know exactly what they are doing. They hate America and would just as soon see it lying on the ash heap of history. What a better way to achieve that goal than saddling it with a crushing debt load, devaluing the dollar, pumping up inflation and unleashing high interest rates upon the massive debt? Sounds like a ben bernake program at work, don’t it?

And now, courtesy of the public schools system that we continually heap money upon, we are stoopid enough to let them get away with it. Some are even simply oblivious to this imminent threat and mindlessly rejoice over their “free” condoms and blog with joy in their hearts.

Enjoy your ride to the bottom.

Numbers-R-US

February 28th, 2013
7:55 am

If only the Georgia GOP had implemented policies that improved the state and local economies and increased jobs over the past ten years or so, we would not have so many people in need. Instead, Kyle and Co. would have us focus on someone, anyone, else as the source of the problems here.

Lil' Barry Bailout - OBAMAPHONE!!!

February 28th, 2013
7:55 am

VA and Medicare actually pay true costs of services.
————————–

A laughable, ignorant falsehood.

Tiberius - pulling the tail of the left AND right when needed

February 28th, 2013
7:57 am

WHO ratings are meaningless, not so independent non-thinker.

Already debunked multiple times.

Please pay attention.

Thomas Heyward Jr

February 28th, 2013
7:57 am

Approximately 16,000 new IRS agents will be hired to help oversee the implementation of Obamacare, and the Obama administration has given the IRS 500 million extra dollars “outside the normal appropriations process” to help the IRS with their new duties.
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I can promise you………….the Kenyen will NOT be cutting those guys out of the fake budget cuts.

Aesop's Fables and other Lib Economic Theories

February 28th, 2013
7:58 am

Why do liberals never complain about the high cost of a college education? You could get a heart, liver and lung transplant with a lifetime warranty for the average cost of one semester. When will they set upon the faculty lounges with their fascist brutalities?

Thomas Heyward Jr

February 28th, 2013
8:00 am

It’s true: You are 64 times more likely to be killed by your doctor than by someone else wielding a gun. That’s because 19,766 of the total 31,940 gun deaths in the USA (in the year 2011) were suicides. So the actual number of deaths from other people shooting you is only 12,174.

Learn more: http://www.naturalnews.com/038889_doctors_guns_statistics.html#ixzz2MCM6RIfq
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Just Wait until Obama-care fully kicks in.

Numbers-R-US

February 28th, 2013
8:01 am

Meanwhile we anxiously await the positive economic impact on Georgia of a new stadium and the scores of direct and indirect jobs from Caterpillar’s tax-free plans, etc. Do tell us more, Kyle.

Lil' Barry Bailout - OBAMAPHONE!!!

February 28th, 2013
8:01 am

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
———————————-

Obozo’s spent $6 trillion more than the government took in. He spent about $3 trillion more than Our President Bush would have, had His spending trajectory continued into the last four years. And yet, unemployment is still higher today than it was when Obozo took office.

So much for that “stimulus” argument.

Numbers-R-US

February 28th, 2013
8:03 am

Why do liberals never complain about the high cost of a college education? You could get a heart, liver and lung transplant with a lifetime warranty for the average cost of one semester. When will they set upon the faculty lounges with their fascist brutalities?

Phoenix University says What!

Lil' Barry Bailout - OBAMAPHONE!!!

February 28th, 2013
8:09 am

Red herring, Numb.

The outrageous costs of higher education will never be addressed by progs. More money to the folks pushing their liberal fascist agenda is not a problem to them.

Aesop's Fables and other Lib Economic Theories

February 28th, 2013
8:12 am

The excessive costs of our current medical system can be classified into three major categories:

• The first, and by far the largest excess cost, is due to the current overuse of medical resources by patients. Overuse is the rational response of consumers who do not have to pay the entire cost of the medical services they use. The causes of those excess costs are Medicaid, Medicare, and tax laws that provide incentives for individuals to have their employers purchase their medical care in the form of private health insurance.

• The second category of excess cost consists of administrative and paperwork costs that are unnecessary for the provision of health care, but that have come into existence because of the current patchwork of third-party payers and their attempts to control their increasing costs by closely monitoring the behavior of doctors and patients. Even worse is the fact that those cost-containment activities do not seem to have contained costs very well. -1994

So let’s expand it!

Can I get a duh?

southpaw

February 28th, 2013
8:15 am

“Phoenix University says What!”

Southpaw says “Look at some other universities with higher prices, and either turn up your hearing aid or get one.”

Folks, get ready for possible overuse of the “hearing aid” comment. It’s coming when I notice a lack of hearing (e.g., by Phoenix University).

curious

February 28th, 2013
8:15 am

Based on comments here, we should eliminate all public funding for healthcare and education. Once the bottomless well of public money dries up, we’ll see costs get more reasonable or at least stop rising almost exponentialy.

Thomas Heyward Jr

February 28th, 2013
8:17 am

Questions during the debates……………America’s last chance back in 2010————–

Q: How do you propose to keep Medicare financially solvent?
RON PAUL: Well, under these conditions, it’s not solvent and won’t be solvent. If you’re an average couple, you would have put $140,000 into it. And in your lifetime, you will take out more than three times that much. So a little bit of arithmetic tells you it’s not solvent, so we’re up against the wall on that, so it can’t be made solvent. It has to change. We have to have more competition in medicine. And I would think that if we don’t want to cut any of the medical benefits for children or the elderly, because we have drawn so many in and got them so dependent on the government, if you want to work a transition, you have to cut a lot of money. Some revamping has to occur. What we need is competition. We need to get a chance for the people to opt out of the system. Just–you talk about opting out of Obamacare? Why can’t we opt out of the whole system and take care of ourselves?
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OPT-OUT………….Imagine that.
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Paul was ridiculed……….and the Republican Progressives voted for the Step-Father of Obama-Care.
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Romney-Bots………..shouldn’t complain.
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lol

Aesop's Fables and other Lib Economic Theories

February 28th, 2013
8:18 am

Meanwhile, the White House is backing off its prior warnings that the sequester will strike a quick and devastating blow to the economy.

A senior GOP aide on Wednesday highlighted news reports that Obama’s political advisers now concede the cuts will not immediately disrupt federal services, managing public expectations in the wake of dire warnings.

Yeah, no kidding. How much foam was spilt over………… nothing?

How many lies were told right to your face?

Numbers-R-US

February 28th, 2013
8:19 am

Meanwhile Kyle should note that there are fifteen direct jobs created for each McDonalds that opens thereby proving that greasy fast-food provides a 1400% direct return with the added benefit of untold numbers of indirect jobs in healthcare down the road. And all at no cost to the tax payers! What a DEAL!

Aquagirl

February 28th, 2013
8:19 am

since even most of your regulars probably would object to folks dying on our sidewalks and that even lower income people will get healthcare of some sort somewhere

You’ve confused this blog with another one.

independent thinker

February 28th, 2013
8:21 am

Yeah Aesop I love that lie that Obama was cutting $716 billion from Medicare and Granny won’t get medical care followed by the same liars stating Obama refuses to cut entitlements. Amazing- that’s why those liars belong to the stupid party

Numbers-R-US

February 28th, 2013
8:21 am

Southpaw apparently thinks he made a relevant comment about his broken hearing aid.

indigo

February 28th, 2013
8:25 am

Aesop – 7:49 “these liberals know exactly what they are doing. They hate America”

What a load of sh*t.

That sort of hysterical rhetoric explains why most of us here consider you to be a true bottom feeder.

southpaw

February 28th, 2013
8:27 am

I don’t have a hearing aid–broken or otherwise. Don’t need one. And I’m not the one pointing out who can’t hear and says “What” as a result. Now if Phoenix University is surprised, instead of hard of hearing, I’ll say nothing about hearing aids.

Just Saying..

February 28th, 2013
8:29 am

The bases for weighing the Medicaid expansion…

The basis for weighing the Medicaid expansion…

Cherokee

February 28th, 2013
8:29 am

What indigo said.

Cherokee

February 28th, 2013
8:32 am

“current overuse of medical resources by patients”

Yeah that’s the ticket – if those crazy Americans would just stop looking to the medical field for help when they get sick, all our problems would disappear!

Voila, thanks Aesop, for bringing that to our attention…

Cherokee

February 28th, 2013
8:35 am

Kyle there are lots of hospitals – typically small ones in rural areas – that are providing free medical care to poor people. Now, that cost is passed on to other insured folks who use those facilities. The federal government is offering to ease that burden.

Sorry, but that’s a no brainer… take the Medicaid expansion, Governor Deal.

you can't fix stupid or Democrats

February 28th, 2013
8:39 am

America soon than later the bills will have to be paid. I wonder when China will want its money? We need to cut up those credit cards.

Finn McCool (The System isn't Broken; It's Fixed)

February 28th, 2013
8:43 am

And don’t forget the power in numbers in bringing down costs.

jconservative

February 28th, 2013
8:45 am

Actually there is nothing wrong with the current health care delivery system in Georgia and the nation. If one gets sick and has no insurance, the system absorbs the costs by increased fees to those companies and individuals holding private insurance plans.

Centrist

February 28th, 2013
8:52 am

Folks who don’t now qualify for free medical care under the already over generous Medicaid program are free to move to Florida and New Jersey to get it. At least for New Jersey it will raise the average IQ for that state along with Georgia’s.

Aynie Sue

February 28th, 2013
8:52 am

Listen up all you deficit whiners! Which do you prefer: a shrinking national debt with a depressed economy, or a growing national debt with a recovering economy?

Those are the only two choices. A recovering economy and austerity are incompatible. There is only one way to prop up or kick-start a struggling economy: a massive infusion of money, obtained by federal borrowing or, better yet, by taxing those who have money to lend.

And, don’t bring up that malarkey about private investment taking up the slack. Private investors don’t squander capital in a struggling economy with low labor participation and low consumer demand. They invest capital whenever the economy is stable and the prospects are promising.

Republicans have the debt/recovery formula backwards: they borrow money in times of plenty, and demand austerity in times of recession and stagnation. President Reagan initiated big-time, peace-time government borrowing, and squandered it on tax cuts and useless military projects. President Bush killed the federal surplus he inherited by giving massive tax cuts to the rich, and borrowed to finance a counter-strategic war in Iraq and a futile war in Afghanistan. Now, as our nation struggles to recover from the worst financial crisis since the Great Depression, Republicans criticize federal deficit spending and demand austerity.

What’s up with you people? Will you never learn from your long history of mistakes?

Stephenson Billings

February 28th, 2013
8:54 am

“The excessive costs of our current medical system can be classified into three major categories:”

Yea, that’s a big “Duh!”. Imagine how much your auto insurance would be if you used it for oil changes and tire repair… and how much more those services would then cost?