The costs and the benefits…

There’s been more discussion about whether some states will or will not do the Medicaid expansion. To date, while there’s been lots of posturing, only 6 GOP Governors have said they won’t expand Medicaid under the Affordable Care Act. Many others haven’t made that commitment, and I imagine that after the election, even some of those remaining Governors may come around.

The states that indicate they aren’t participating are doing so because of politics, not cost. Look at history: when the State Child Health Insurance Program was created a dozen years ago, it provided a 2:1 match, and every single state in the union saw it as a great deal and took up the offer within a few years. When Medicaid was created 40 years ago, 49 states took up the offer within a few years (only Arizona held out for 10 years), and that was for many states a 1:1 match. So while there might be some initial resistance to “Obamacare” before an election, it will be hard for even GOP Governors to turn down a remarkable 9:1 match–if not for their citizens under the poverty level, then for the hospitals and health systems, the counties and the clinics that all bear the burden of the uninsured now, and are hoping for that relief in 2014 and beyond.

But the politics in other states may lead to confusion here abou the costs and benefits of the ACA and the Medi-Cal expansion. George Skelton of the LA Times wrote a column that gave readers a false sense of the potential costs, the trade-offs, and seemed to ignore the offsetting savings from other parts of the ACA?

It cites an old and wildly inflated Schwarzenegger cost estimate of $2.65 billion, which was based on a earlier version of the federal bill, and that was severely pumped-up because it included a Medi-Cal provider rate increase for all enrollees—a long-sought goal but something that the law does not require. Governor Schwarzenegger was using trumped-up numbers for negotiating purposes with the federal government. Once the law was signed, he embraced the law and moved forward with its implementation. That was done by GOP Governor Schwarzenegger, well before Governor Brown (as implied by the article.)

In fact, the newly eligible will not cost the state more money–not this year, nor next year, nor the year after that or after that. The 100% federal reimbursement for the newly eligible is for three years (not two years, as the article stated.) Any state costs for the newly eligible Medi-Cal patients doesn’t start until 2017, and it’s only 5-10% of the cost from then on. And to assist those above 133% of the poverty level, all subsidies in the Exchange are 100% federally-funded, now and into the future.

This infusion of dollars is needed to our health system, especially after the budget cuts that have been suffered. The Skelton article says “California always has had one of the most generous Medicaid programs for patients,” but that’s not true by any measure. Several states have broader eligibility, and after the elimination of the dental, vision, podiatry, psychiatry and several other benefits in 2009, our benefit package is about average. But we do have particularly low provider rates.California generally has one of the lowest per-patient Medicaid spending in the country.

Beyond getting key facts wrong (another example: California’s early expansion of Medi-Cal now covers over 430,000, not 280,000), the column misses that the ACA is not a burden but a bargain—especially for California, with its sky-high uninsured rate.

In fact, California is already getting $500 million a year toward budget savings, billions for our health system, and millions more in various grants for everything for community clinics to consumer assistance to rate review. Without the Affordable Care Act, the California Budget situation would be much worse. And in 2014, it will provide help for millions of unsinured–and the hospitals, health programs, counties and clinics that provide care for them now.

The article disregards the costs of having such a high uninsured population to California, and specifically to our budget—and the savings that would be generated from having those Californians covered. Those savings may offset the marginal costs in the out years. If anything, California will disproportionately benefit from the ACA, due to the high uninsured population.

Health Access California promotes quality, affordable health care for all Californians.
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