Last July, when the Supreme Court ruled on Obamacare (I
never liked that term, but now even the President has proudly embraced it), it
tossed something of a hot potato into the states’ laps.
Under the Affordable Care Act (that’s the politer way of
saying it), states were required to extend Medicaid coverage to
everyone living at 133% of poverty or below; if they didn’t, they would lose
all the Federal funding they already receive for the Medicaid patients they cover right
now. And since the Federal government covers about 75% of current Medicaid
costs, that’s a pretty hefty chunk of change. But the Supreme Court threw out
that provision of the law, and states can now decide whether or not they want
to extend Medicaid, without fear of losing current Federal Medicaid dollars.
That’s the hot potato: whether or not to extend.
For most states, extending coverage to 133% of the poverty
level means a big increase in the Medicaid population (in Montana, for example,
the Medicaid roles would expand by more than 50,000 people). So to make it easier for the states, under
the ACA the Federal government will pay for 100% of the expansion for the first
three years; after that, the states will have to pick up an increasing share of
the cost, topping out at 10% after another three years.
Now that sounds like a pretty good deal. For every one dollar the state spends to cover
low income people who currently have no insurance, the Federal government will throw in nine. What’s not to like? Seems like a
no brainer, but as Mike Dennison recently reported,
a lot of folks, including Governor Schweitzer, Steve Bullock and Rick Hill, are
sounding kind of worried. And what they seem to be worried about is the impact
that Medicaid extension will have on the state budget and taxpayers.
It’s a legitimate concern. The state will certainly have to
spend something to extend Medicaid, although it’s not clear at this point how
much or whether, if the program gets too expensive, it can be trimmed back. And
with Romney and Ryan promising draconian fiscal austerity, we probably need to
think about what will happen if they are elected and the 9 to 1 Federal match disappears.
But when it comes to deciding whether or not to insure
another 50,000 Montanans, worrying only about the state’s bottom line misses
the big picture.
For one thing, those 50,000 people already get medical care,
albeit haphazardly, in hospital emergency rooms and public clinics. And
somehow, Montanans end up paying for most of that care one way or another: in
higher hospital rates, higher health insurance premiums, higher taxes to pay
for higher premiums for state employees, and so forth. But when these 50,000 patients
get covered by Medicaid, most of the cost will be shifted to the Federal
government. So while extending Medicaid may cost Montana taxpayers a chunk of
money, they will make it back, several times over, in lower health insurance premiums
and hospital charges.
Of course Montanans are going to pay some of the taxes that will
make the Federal contribution to Medicaid extension possible, but we’re going
to do that even if we turn down extension here at home. In that case, we’d not
only continue to cover costs for the uninsured in Montana through higher
premiums and hospital charges, we’d also help pay for Medicaid extension in
Florida and Maine and California and New Jersey and… well, you get the idea.
Maybe the most important thing to think about, however, is
this: when those 50,000 uninsured Montanans get covered by Medicaid, the amount
and kind of health care they receive will change significantly, and their
outcomes will improve dramatically. They
will receive more preventative care, experience greater medical security and fewer
medical bankruptcies, feel better and live longer.* In short, they will enjoy
the same relationship with and access to the health care system as the rest of
us. They will be treated as the rest of us expect to be treated. And without
that, health care reform is a hollow shell.
*There have been a number of studies of the impact of
Medicaid expansion in a number of states in which it has occurred. Check out
reports in Bloomberg
and New
York Times on reduced mortality, and again in the Times
and the New England
Journal of Medicine on impacts on costs and medical and financial outcomes
for new Medicaid patients.
