There was a fascinating news
report out of Arizona this past week that embracing the ACA Medicaid
expansion will result in $8 billion in new federal dollars flowing into the
state over four years – in return for an investment of $1.5 billion from the
state.
That looks pretty good on the surface, and the 435,000 people
who will become insured as a result are a nice bonus.
What many people don’t recall is that Arizona was the last
state to enroll in the Medicaid program.
So a report such as this from a state whose embrace of Medicaid was a
long time coming is especially noteworthy.
After seeing numbers like that, I can’t help but wonder what
might happen if the state decides not to expand Medicaid. Its residents could lose a lot of money in
return.
This is what Florida
is facing.
We can calculate just how much money every resident of
Florida will lose by reviewing what Florida Attorney General Pam Bondi wrote
to the Supreme Court this past January:
Florida estimates that, as a result of the ACA, its share of
Medicaid spending will increase by $1 billion annually by the end of the
decade. Florida anticipates spending approximately $351 million on its share of
the cost for newly eligible program participants who are presently uninsured
and $574 million on the currently eligible but unenrolled.
Setting
aside for the moment the $574 million she attributed to currently eligible
people – who will be entitled to Medicaid whether or not the expansion goes
through – let’s accept her calculation that the expansion population will cost
the state $351 million annually “by the end of the decade.”
This means that the federal
government will be sending at least $3.2 billion to Florida annually in 2020 if
Florida accepts the Medicaid expansion.
That comes
to $168 Florida will forfeit per person per year if it rejects the expansion, which
represents a 90% share of the cost of the expansion. And the forfeit is even higher in the years
before 2020.
These are
dollars that Florida residents will have to pay out of pocket if the federal
funds don’t flow.
Here’s
why. Estimated Medicaid expenditures
represent just that – projected actual health care expenditures, not insurance
premiums or some other indirect cost.
So the $3.5
billion will be spent, one way or the other.
In the absence of Medicaid expansion, it will be paid by state and local
taxes, offset in part through charitable giving, or financed through private
insurance premiums (with an additional 15% administrative overhead).
In other
words, the $3.5 billion won’t just disappear into the atmosphere somewhere.
When Mitt
Romney, who along with Florida Governor Rick Scott opposes the Medicaid expansion,
was asked for an alternative, he must have felt put on the spot. Because he suggested that hospital emergency
rooms could take up the slack, although he knows that hospital ERs are the last
place a community wants to provide indigent care. This is because the cost is so high.
I’m not happy about having to cough
up $1,244 over the next seven years so that my governor can make a point that
he doesn’t like a federal law.
I already
get that, and understand that he and the six other governors who are thinking
like him are probably a lost cause to my way of thinking.
But most of
our state legislators are running for office this fall, and they may actually
care what we think. I think we can do a
lot of good with $3.5 billion. So I’ve
got a question for them.
Who’s got a
better idea than expanding Medicaid for paying this $3.5 billion bill?
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