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Regardless of action, Medicaid costs will rise

November 28, 2012

By SID SALTER

A report released this week by the Kaiser Commission on Medicaid and the Uninsured suggests that regardless the decision of Mississippi’s state government on whether or not to expand Medicaid as part of “Obamacare” or the Affordable Care Act (ACA), state Medicaid costs will increase with or without the expansion because those made newly eligible for Medicaid – expanded or not.

“State Medicaid costs will jump $76 billion, or nearly 3 percent, over the next decade if all 50 states decide to expand Medicaid eligibility in 2014 under the federal health law. But state spending on the program would still increase to the tune of $68 billion even if not a single one opts for the expansion,” according to the study released Monday by the commission.

Depending on one’s political and fiscal frame of reference on the question of expanding Medicaid in Mississippi under the ACA, the Kaiser report offers something for everyone.

For opponents of Medicaid expansion in Mississippi, which to date includes state Republican heavyweights like Gov. Phil Bryant, Lt. Gov. Tate Reeves and House Speaker Philip Gunn, the report supports the contention the Medicaid expansion can’t be accomplished without increased costs to state government.

“States are deciding whether to expand the Medicaid program, and they clearly will be balancing improvements in coverage against new costs for states,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured upon release of the study. “While some states will see net savings, others will need to weigh the trade-offs between small increases in state spending in return for large gains in coverage supported by mostly federal dollars.”

The report clearly names Mississippi – given the large number of uninsured and Medicaid eligible under the ACA – as one of the states that will see such cost hikes.

Yet for proponents of Medicaid expansion – which includes most of the state’s hospitals, public health care advocates and advocates for the poor – also could use the Kaiser reports to support their argument that Medicaid expansion will serve as relief to the state’s large number of uninsured and provide a boost to the state’s economy as well.

In announcing the report, Kaiser officials said: “States that had already expanded coverage to adults – such as Vermont, Massachusetts, New York, Maine, and Maryland – may see savings under the ACA due primarily to higher matching rates for already covered populations. Meanwhile states with relatively large uninsured populations prior to any coverage expansions – including Nevada, Florida and Mississippi – are likely to see higher increases in state costs, but these increases are expected to be small relative to decreases in the uninsured and increases in federal matching funds.”

While the Kaiser Foundation is a nonpartisan group, it’s safe to say that it’s not exactly a bastion of conservative fiscal policy. So when a Kaiser report outlines that the Mississippi Legislature faces a choice between raising public health care costs and expanding health care coverage to the state’s poor and working poor, one can be assured that the increased costs are real and so is the potential to help the uninsured.

The report claims that if uncompensated care costs are considered, increased cost “even in states with the highest level of increased Medicaid costs from the expansion, new state spending relative to general fund expenditures is approximately 1 percent or less.”

Opponents points to possible future federal policy shifts in calculating the state’s share of Medicaid expenditures after expansion as the greatest danger in expanding Mississippi’s Medicaid program. That, of course, and the small matter of federal debts and deficits coupled with growing entitlement programs like the ACA.

Sid Salter is a syndicated columnist. Contact him at 662-325-2506 or ssalter@library.msstate.edu.

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