The expansion of Medicaid under the Affordable Care Act (ACA, aka Obamacare) continues to spur contentious debate. Critics warn of a growing “dependency” ratio. More than one in five people in the U.S. are insured by Medicaid. It covers almost half of all births, one-third of children, and two-thirds of people in nursing homes. When Medicaid, Medicare, tax credits for the ACA, and other government healthcare programs are added all up, it easily comes to well over half of all Americans dependent on government programs and/or taxpayer support for medical insurance.
And this number could get much larger. Medicaid currently covers 70 million people and continues to grow, but it will increase even faster during times of an economic downturn when people lose their jobs and employer sponsored health insurance. In addition, healthcare spending continues to rise. All of these factors leave many current and former government healthcare officials concerned over the sustainability of Medicaid.
Republicans in Congress have tried to de-fund Obamacare over 65 times, and 20 states – all with either Republican governors, or state legislatures controlled by the GOP – have refused to expand Medicaid services. Despite these political battles, most experts believe that all states will eventually expand Medicaid in the next decade or so, as the dollars are too big to leave on the table.
For instance, in Kansas, Republican Governor Sam Brownback, who has been a staunch opponent of the ACA, has recently said he was not opposed to expansion as long as it was 100% paid for and if the state legislature approves it. Brownback’s change of heart may be because of a study sponsored by the Kansas Hospital Association which shows that the state’s decision not to expand Medicaid in 2014 and 2015 will cost it $714 million in federal funds, and an estimated 3400 jobs in 2015.
Besides Kansas, the other states that have not expanded Medicaid may also be influenced by Kentucky’s experience with expansion under the ACA. Kentucky, which has voted Republican in seven of the last nine presidential elections (in 1992 and 1996 it went for fellow Southerner Bill Clinton by very narrow margins), has adopted expansion, and it is widely popular among the vast majority of voters there.
In addition, a study earlier this year done by Deloitte Consulting and the University of Louisville, shows that the ACA will generate a large positive fiscal impact for Kentucky over the next seven years.
Like many states, Kentucky spends more of its budget on Medicaid than almost anything else. But the Deloitte report shows that because almost all of the expenses of covering the new enrollees are covered by federal dollars, any new costs will be more than offset by the positive economic effects of expanding the program. This includes additional new Medicaid revenue to providers, which totaled more than $1 billion in 2014 alone, and resulted in the creation of lots of jobs in healthcare professions.
It was initially predicted that fewer than 200,000 people would join Kentucky’s Medicaid rolls in 2014 under the ACA. Instead, 375,000 did, and that number has since grown to 388,000. The percentage of uninsured people in Kentucky has dropped more than any other state except Arkansas.
The Deloitte report also found that Kentucky citizens who qualified for Medicaid under the ACA expansion are seeking treatment at a much higher rate than pre-ACA enrollees. This was especially true for chronic conditions like diabetes, high blood pressure, and depression. These types of preventative services usually prove to be cost-savers over highly expensive treatments from untreated conditions related to these illnesses.
The Deloitte report is the first in-depth evaluation of the financial effect of the ACA Medicaid expansion on a state, and it may reframe the debate in the 20 states that have not yet adopted, over whether to provide Medicaid to more low-income adults.
I have spent parts of the past five weeks studying Medicare, Medicaid, and the ACA (see links to these blogs below); and I think that all of the bickering over Obamacare misses the larger point, namely, we spend too much on healthcare – both the federal government, and as individuals. Healthcare spending in the U.S. is much higher than all other first-world nations, but polls and studies in those countries rank their patient satisfaction and quality of care as comparable, or better, than that in America. So, we are paying far more, but not getting substantially better care.
To me, this makes the ACA part of a larger discussion. Healthcare is a big topic and a huge part of the federal budget. I believe the growth rate of federal spending on healthcare is unsustainable (as is our growing national debt), so I plan to write two or three more blogs about it.
I’m also in the process of studying the federal budget, and I’m asking my readers to follow along as I work toward a comprehensive and bipartisan fiscal plan. I hope to finish this process in the next several weeks.
I welcome your feedback on these topics. Feel free to leave your thoughts in the “comments“ section below. If you’d like to keep your thoughts private, please reply with an email instead.
Links to related blogs:
Medicaid and Obamacare: http://www.commonsensecentrist.com/medicaid-and-obamacare/
Options for Fixing Medicare Spending: http://www.commonsensecentrist.com/options-for-fixing-medicare-spending/
Medicare turns 50 – will it survive another 50 years: http://www.commonsensecentrist.com/medicare-turns-50-will-it-be-around-another-50-years/