Medicaid expansion a boon, not a cost, to states | Arkansas Blog

Medicaid expansion a boon, not a cost, to states

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This report from Kaiser is worth repeating with the Hutchinson administration promising to reduce dramatically the number of people covered by the Obamacare Medicaid expansion by limiting eligibility to only the poorest people.

Some 320,000 are benefiting from health coverage now thanks to Obamacare in Arkansas. Gov. Asa Hutchinson wants to reduce the number covered by reducing eligibility from those at 138 percent of poverty level or below to 100 percent of poverty level. This would push tens of thousands into a private marketplace. Those cut off would likely be too poor to pay the cost, whatever the federal subsidies or "savings accounts" offered.

State budget officers assessed the expansion in 31 states from 2010 to 2015. Findings:

The researchers concluded that when states expanded eligibility for the low-income health insurance program they did see larger health care expenditures — but those costs were covered with federal funding. In addition, expansion states didn’t have to skimp on other policy priorities — such as environment, housing and other public health initiatives — to make ends meet.

“This is a potential big benefit, not only to people who get coverage, but to state economies,” said Benjamin Sommers, an associate professor of health policy and economics at Harvard University’s public health school, and the study’s first author.

This finding — that states expanding Medicaid didn’t encounter unforeseen budget problems — shouldn’t be surprising.

“Expansion is basically free” to the states, agreed Massachusetts Institute of Technology economist Jonathan Gruber, one of Obamacare’s architects who worked with Sommers to systematically compare the budgets of all 50 states to examine Medicaid expansion’s impact. “That’s the big insight,” he said. “There’s no sort of hidden downside.”
In Arkansas, we're convinced there's only cost — and no benefit in all the jobs and taxes created, not to mention lives saved — from the eventual 10 percent state share of the program. Slashing coverage by a third will cut proportionately into all the side benefits, however.

Researchers acknowledge the situation changes with a growing state cost and there's uncertainty about impact.

But even when states do take on more of Medicaid’s cost, that may not pose such a burden, suggested Sara Rosenbaum, a professor of health law and policy at George Washington University. Expanding Medicaid brings in other potential economic benefits that this paper doesn’t account for — less uncompensated care in hospitals, for instance — that could offset the expenditures states ultimately take up.

A bigger concern, some experts say, is that — even without the Obamacare repeal — some GOP health proposals would change the federal government’s Medicaid funding mechanism from being an open-ended match to a block grant or per-capita cap in an effort to curb national spending. Those proposals would take away at least some of the federal dollars that have insulated state budgets.


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