Medicaid Expansion: Is there a downside?

Medicaid Expansion, state by state
Since the SCOTUS ruled on Obamacare and Medicaid Expansion last summer, the number one question in the minds of people on both sides of the debate has been, What will Tennessee do?.

While the Governor said no to a state run exchange he has weighing his options on Medicaid expansion for months now. I thought a decision would be made in December, until the deadline was moved once again. According to reports, Gov. Haslam will make a decision this week on the issue.

With cocksure legislators predicting a no and a stated opposition from the Governor about bills seeking to tie his hands, how and what the decision will be is hard to predict.

Red state Governors of states like Arizona, Ohio, and Florida haven’t been able to put ideology over the massive economic impact Medicaid expansion would have on the state. Even Shelby Co. Mayor Mark Luttrell (CA Link), a Republican, albeit a more moderate one, has supported expansion.

Polls show expansion is popular in the state, garnering the support of nearly 60% of respondents.

Study (CA Link), after study, after study after study tout the positive economic impact along with the health benefits for one of the country’s most obese and least healthy states (41 and 39 respectively).

There have been far too many Op-Eds to list all of them in support of expansion (Tennessean link). And even the League of Women Voters and the Tennessee Medical Association (PDF Download) support the idea.

So what’s the rub?

Ideology over Opportunity

The principal issue seems to be ideology, though there are some reasonable sounding points that ignore a big aspect of reality pushed by those opposed to Medicaid expansion.

The primary bill seeking to block expansion, sponsored by Brian Kelsey (R-Germantown) and his former campaign manager, turned State Rep. Jeremy Durham (R-Franklin), is up for a vote in the Senate Commerce and Labor Committee tomorrow. What happens there is anybody’s guess, though it has been deferred three times over the past few weeks.

Kelsey contends he doesn’t believe the Feds will hold up their end of the bargain. There’s some reason for that skepticism. Deep cuts in 2005 and 2010 to the Medicaid system hurt patients. Its understandable, especially considering the gridlock in Washington, that someone would be concerned about bringing in a bunch of people on to the Tenncare (Medicaid in TN) roles, only to be dumped by a intransigent legislative branch in Washington.

That said, Medicaid is on the “Mandatory spending” side of the budget, not the discretionary side. That inoculates it somewhat from the whims and fights of the discretionary budget. That doesn’t mean its bulletproof, but less likely to sway with the winds of passion.

Considering all this, Kelsey’s position is ideology masquerading as sound fiscal policy mixed with a populist style distrust for the government.

What Kelsey doesn’t seem to give any credence to is the opportunity this presents, both for the people who would be receiving coverage, and those who would be gaining employment (through additional staffing and education) to help treat these individuals. Dr. Cyril Chang, Professor of Economics at the University of Memphis, and someone who has been actively involved in healthcare for a very long time estimates that for every $1 of Federal money spent in Tennessee on Medicaid expansion, the state would reap $2.60 in reward. Considering the first three years of the program the Feds are footing the bill, that’s a huge chunk of economic stimulus for the state that’s hard to ignore.

Expansion is immoral? Really?

Another argument offered up by the ultra-conservative Beacon Center of Tennessee is the idea that not only is Medicaid expansion too expensive (its free for 3 years remember) but also, somehow immoral (infographic).

Now I’m not a big fan of infographics for something this complex. The general “dumbing down” nature of the medium just doesn’t make them a good choice for such things. Also, I can only draw stick figures, so that has something to do with it.

But what the Beacon Center’s infographic has done is not only distill information, but also misrepresent it. Seriously, there’s not a single thing in this infographic that isn’t misleading or wrong. Here’s a sample:

1. Tenncare is 27% of the state budget. (Kinda True)
26% of state funds go to Tenncare…or $2.8b. However, the Feds give a 3:1 match on those dollars making the total budget for Tenncare $9b. This additional revenue makes Tenncare over 31% of total State spending. Hard to believe they lowballed it. (Close but no cigar)

2. Employers will dump people meaning more costs for TennCare
The only employers that could do that are ones paying their employees less than 133% of poverty, or about $25,000/yr for a family of 3. FYI, that’s 12 dollars an hour split amon all the earners in the household. So if there are two earners, they’re not working full time (which is not uncommon), making minimum wage, and likely don’t qualify for their employer’s healthcare plan in the first place. (Imaginary problem)

3. Loss of subsidized private insurance for people between 100% and 400% of FPL (poverty).
First, this ignores that people up to 133% would be covered. Second, aside from right wing blogs and other such drivel, I couldn’t find any sourcing on this, except for a CBO study that said about 3m people nationwide would be effected by this, or <.1% of the population. Also, House Democrats have proposed a fix for this problem, if only Speaker Boehner would allow them to present it. (Baby with the bathwater)

There’s a whole lot more wrong with the infographic. But since I have other things to do today, I’ll leave it at that. For a policy research center, seems like a lot of research isn’t being done.

Fail forward fellows. I’m sure your Koch overlords are proud of you.

There isn’t a real downside, only an ideological/partisain one

There’s no way to cover the ins and outs of TennCare expansion in a 1000 word post. That’s why I linked all the things I did…so you can see for yourself. But here’s the key takeaway that I think is really important:

• Between 330,000 and 450,000 additional people would be covered (5% to 7% of the state population)
• An additional $10.5b in direct money to the state in the first five years.
• That money doesn’t get spent and stop. At $2.60 per dollar spent, total impact would reach as high as $27b in the first five years.
• More than 10,000 good paying, skilled jobs.
• We’ll have to educate those 10,000 new workers, increasing our post-high school education numbers and enrollment in institutions of higher learning.
• A huge drop in uncompensated care, saving the state up to $1.6b in the first five years.
• Less uncompensated care means hospitals all over the state will be more economically viable, especially in rural areas where they are struggling.

So here’s to hoping the Governor does the right thing and chooses to help working poor families get some healthcare coverage. At this point, it can’t hurt us. And with the increased productivity from a healthier populace, and the decline in medical bankruptcies from a reported 62% in 2009, we’ll all feel a little fiscally, and physically healthier.

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