The current decisions by state governors and legislatures about expanding Medicaid.

[imgcontainer] [img:medicaid.png] [source]Washington Post[/source] The current decisions by state governors and legislatures about expanding Medicaid. [/imgcontainer]

The big choices in health care reform now rest with the state governors.  The biggest is whether to accept the federal offer of support for Medicaid expansion.

This turns out to have a smaller price tag than a lot of people suppose, and a lot of lives depend on it.

The Medicaid program is the government health insurance program to pay doctors, hospitals and others who provide care to people who don’t have much money.  As the program stands now, the richest states pay half the money for their people and the federal government pays the other half.  

Less rich states pay a smaller proportion and the feds a larger share.  The states can decide who gets covered beyond some basic federal minimums.

Between one sixth and one fifth of all Americans are on Medicaid. It pays for over 40% of all births and 70% of nursing home care.  

Medicaid is a Rural Issue

Medicaid is a rural issue because a higher percentage of low income people live in rural communities. And rural families are less likely to have private health insurance.

Medicaid is a major economic driver. The National Center for Rural Health Works at Oklahoma State University studied the impact of 2010 Medicaid spending in Oklahoma.  The Center found that Medicaid was responsible for 113,000 jobs and a total of $10.5 billion in economic activity in the state as the Medicaid money circulated through the economy.  The State put out $785 million for its share of Medicaid health care and got back $351 million in taxes generated by the program’s spending. 

 One of the core strategies of the Patient Protection and Affordable Care Act, “Obamacare”, is to get everyone with an income below a certain amount, 138% of the poverty level, covered by Medicaid beginning in 2014, thereby getting 14-17 million more people health insurance.  

Some states don’t come close to covering people up to that level.  A few states cover people earning more than that.  “Obamacare” promises to pay the states the whole cost of covering all the newly insured people for the first four years.  Thereafter the federal government will pay the states 80% of the cost and the states will be responsible for the remaining 20%.

[imgcontainer] [img:2010HealthIns528.jpg] [source]Daily Yonder/Census[/source] This map shows the rural and exurban counties that had higher percentages of residents under the age of 65 without health insurance than the national average of 17.7 percent in 2010. They are in red. The green counties have rates of uninsured lower than the national average. [/imgcontainer]

The Supreme Court decided that the states couldn’t be forced to accept the federal offer.  Several governors have announced with varying levels of finality that they aren’t going to expand their Medicaid programs, feeling that the programs are already more than their states can afford.  

A True No-Brainer

It turns out that such a simple answer may get a governor a self-inflicted gunshot wound to the foot, some dead hospitals and a bunch of dead citizens who needn’t have died.

Getting people Medicaid health insurance saves lives. 

A study several years ago showed that insured patients hospitalized after accidents were forty percent less likely to die than those without insurance. The uninsured patients got less attention and less care than the insured people.  People die because they lack health insurance.

The Harvard School of Public Health studied the states of Maine, Arizona and New York for five years after they expanded their Medicaid programs, and compared what happened to their death rates with changes in nearby states.  The researchers concluded that one life was saved each year for every 176 adults enrolled in the Medicaid expansion. The life saving effect was stronger in populations with worse health statistics.

Medicaid expansion will be cheap for the states.

The Urban Institute did a study for the Kaiser Commission on Medicaid and the underserved.  The Institute ran the numbers on two situations.  In one, all 50 states took up the federal offer of help expanding their Medicaid programs.  In the other situation, none of the states accepted the federal expansion offer.  

The Institute calculated how much each state would spend on Medicaid in the decade 2013-2022 and totaled up the numbers.  It turns out that if none of the states accept Federal expansion and keep their own rules the same, the 50 states will shell out $68 billion over the next ten years.  The number of people covered by Medicaid will go up about 11% to 60 million as the population grows. 

If the states accept the Federal offer they will spend $8 billion more over ten years (or $800 million per year) but cover an additional 14 -17 million people.  

If the Harvard Public Health number holds, that says the states save 80,000 lives per year for a state outlay of about  $10,000 per life saved.  

[imgcontainer] [img:mediexpansion.gif] [source]Kaiser Commission[/source] The states in black would have to spend the most to increase Medicaid coverage. Ten states would see no increase, or even a decrease in local costs. [/imgcontainer]

That’s similar to discovering cures for breast cancer (41,000 lives per year), prostate cancer (28,000 lives) and stomach cancer (11,000 lives).  It is a big deal. 

Results Will Vary By State

Of course, the results vary more from state to state. Some of the states with Medicaid programs that already cover a lot of people (such as Maine, New York, Vermont, Wisconsin and Iowa) will save money compared to the present as new programs come on line to take a larger share the burden.  

States with poor health statistics (see the Yonder articles on rural life expectancy) will save more lives than predicted by the Harvard study, but will spend more money than some other states as they have more expanding to do. (For example, Nevada, Utah, Ohio, Kentucky, West Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi and Arkansas.)

There isn’t a whole lot of state money at stake, but the amount of new federal money being offered to the states over the decade is huge, about $800 billion. That is $950 billion if all the states expand Medicaid versus $150 billion if they do not. 

One reason the states get such a cheap ride is that they get to collect sales and income taxes on the economic activity created by the infusion of federal money.  Conversely, in states whose governors turn down Medicaid expansion, some hospitals and clinics that take care of poor people may go broke.  Remember, several of the money programs that kept these vital hospitals solvent have been shut down to pay for the Medicaid expansion.

Unfortunately, to this point this debate has been dominated by ideology and partisan principles.

But it’s not often that governors get to be bona fide life-saving heroes. This could be the time — if they can find the courage. 

Wayne Myers is a retired pediatrician and rural medical educator. He directed the federal Office of Rural Health Policy from 1998 through 2000, and was President of the National Rural Health Association in 2003. He and his wife, JoAnn, farm in rural Maine.

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