Medicaid option: Gov. Haslam should step to the plate on Medicaid expansion

Medicaid option: Gov. Haslam should step to the plate on Medicaid expansion

February 12th, 2013 in Opinion Times

Tennessee Gov. Bill Haslam

Tennessee Gov. Bill Haslam

Photo by Associated Press /Times Free Press.

Like many Republican governors who opposed the Affordable Care Act in the run-up to last November's election, Gov. Bill Haslam has been dithering, for mainly partisan reasons, over whether to accept significant federal aid to expand Medicaid coverage for the state's uninsured working poor.

He finally should take his cue from the six Republican governors elsewhere who have decided in the past few days that it is imminently sensible financially -- and appropriately compassionate -- to expand their Medicaid programs to cover citizens whose incomes range up to 133 percent of the federal poverty.

It would be recklessly wrong and massively hurtful for Haslam to say no.

Expansion of Medicaid is one of several essential legs that support the ACA framework for nearly universal care. The law, which will become fully effective next January, was designed to make health insurance affordable and available for uninsured families with incomes above the 133-percent poverty level through competitive, flat-rate, state insurance exchanges. These families would receive income-adjusted subsidies to make their comprehensive coverage affordable.

Uninsured families with incomes of up to 33 percent above the current poverty -- including about 181,000 Tennesseans -- were to be added to the Medicaid program, which is currently funded by 2-to-1 federal matching grant, with the states paying just one-third of the cost. Under the ACA, the federal government would pay 100 percent of the cost for the expanded portion of Medicaid for the next three years, then cut that back to a permanent 90 percent level.

Under that formula, the state's total Medicaid cost would rise by an estimated $200 million by 2019, or by just 2.9 percent by 2022. If Republicans would take off their partisan blinders, they would discover that's actually a great deal for the state.

If the state chooses not to expand Medicaid coverage, most of those people left out would continue to go without health insurance. They would, in turn, continue to get haphazard care in the costliest way: through emergency rooms. And those costs would continue to be shifted, as now, to the premiums of the state's insured population.

Wellness and preventive care, through insurance under Medicaid, would reduce those costs enormously, end the cost-shifting, and give a sense of health security and dignity to lower-wage Tennesseans.

The logic of cost-reduction through expansion of Medicaid insurance is hardly lost on the Tennessee Hospital Association. Like similar associations across the country, the state's hospital industry has been tabulating the costs of the state not expanding the Medicaid population, along with the loss of reduced Medicare reimbursements that would flow from the ACA. The latter involves another part of the calculus that makes the ACA work.

Hospital authorities agreed not to challenge Medicare reimbursement cutbacks under the ACA in return for the higher volume of insured patients they would get through the expansion of Medicaid.

If the state rejects Medicaid expansion, however, the THA calculates that it would lose roughly $5.6 billion and thousands of jobs over the next 10 years. In that scenario, dozens of rural hospitals would have to turn away indigent-care patients and, ultimately, close their doors, harming health care in rural countries and driving more indigent care to metropolitan hospitals.

Tennessee doesn't need to take that route just to stand in futile defiance of the Affordable Care Act. For all the parts to work that are needed for a healthier population, Gov. Haslam has no viable alternative. He must embrace health care reform and broader coverage in Tennessee through Medicaid.