Medicaid expansion in Arkansas was recently debated via guest commentaries by Joe Thompson, Arkansas’ Surgeon General and Director of the Arkansas Center of Health Improvement, and Dan Greenberg, a lawyer, former state legislator and now the president of the Advance Arkansas Institute.
Their pro and con pieces were first published by Talk Business, a content partner with The City Wire.
ARKANSAS’ MEDICAID ISSUE
Arkansas’ projected Medicaid deficit of around $300 million is one of the top issues of the 2013 General Assembly. Legislators have indicated they’re willing to go further in tapping surplus funds and growth revenue to shore up Medicaid funding, particularly to reverse proposed nursing home cuts.
Gov. Mike Beebe has proposed to fix the deficit by expanding Medicaid in addition to cutting some services. In short, expanding the Medicaid program to 138% over the poverty line would be funded by provisions of the new federal health care legislation, commonly known as ObamaCare.
Expansion of Medicaid is one of the few areas that the U.S. Supreme Court has ruled is not required to be enacted by the states. As such, Republicans elected under the promise to fight ObamaCare in every way possible see refusing to expand as one of the few options to fight the new law’s enactment.
Thompson offered the following points in his essay supporting the expansion of Medicaid in Arkansas.
Our health care system is at a tipping point, and the new federal health care law offers both opportunities and threats. Our state leaders are ready to find ways to use what is offered in the best interest of Arkansans. Provisions in this law can be used to complement work already underway to improve Arkansas’s failing health system. Across the state, we are already working on initiatives to improve quality and cost efficiency by changing the way we pay for health services, accelerate use of health information technology, strategically plan for a health workforce to meet our future needs, and reduce the number of uninsured Arkansans.
Most chronic diseases can be avoided or managed less expensively if caught early, but too many people won’t go to a doctor because they don’t have health insurance. So they get up and go to work. They probably won’t be as productive as they would be if healthy, but they show up until the day comes when they are so sick they can’t go to work and wind up in the emergency room. Then they face not only a serious illness but also bankruptcy over medical expenses they can’t afford. I’m not talking about just a few people. One in four Arkansans between the ages of 19 and 64 do not have health insurance. In some counties that number approaches 40 percent.
How long can our health care providers — doctors and hospitals — remain in business without getting paid by so many customers? Increasingly providers are forced to raise the price of care to those who can pay. This in turn forces private insurers to raise premiums, which in turn forces more people to forego coverage.
Extending Medicaid coverage to those who now qualify under the Patient Protection and Affordable Care Act is a chance for Arkansas to level the field by providing benefits to our citizens that other, richer states already provide.
It is understandable to question taking on an additional 250,000 Medicaid recipients when our Medicaid program is facing a budget shortfall. What is not as easily understood is how doing so will actually help close that gap and even save the state money. In fact, health economist and Arkansas Medicaid Director, Dr. Andy Allison, has conservatively projected that Arkansas will save over $100 million in state fiscal year 2015 following the first full year of expansion. By 2021, the savings will grow to more than $500 million annually.
Finally, through Medicaid expansion more than $1 billion new dollars will flow into the state in payment for medical services each year. With this will come increased tax revenue and jobs, mostly in rural Arkansas, which has the highest uninsured rates.
Following are a few points included in Greenberg’s essay opposing the expansion of Medicaid in Arkansas.
Arkansas policymakers will soon be asked to sign onto Obamacare’s expansion of Medicaid. The Beebe administration’s attempts to portray Medicaid expansion as having all upside and no downside are highly misleading: Medicaid expansion is bad for Arkansas, and those who want to see affordable and accessible health care in Arkansas should oppose it.
The central question of Medicaid should be: how do we best care for the poor and sick over the long run? Those who know how Medicaid works in the real world also know this program falls short.
On average, Medicaid pays doctors just 56 percent of the amount that private insurers pay; nearly a third of doctors nationwide won’t accept new Medicaid patients. The barriers Medicaid clients face don’t make their needs go away: instead, they end up using hospital emergency rooms more often. Academic studies have consistently demonstrated the result of this bureaucratic dysfunction: Medicaid patients have inferior access to health care when compared to privately insured patients.
From a taxpayer/budgetary perspective, the expanded funds will almost certainly not cover the increased costs over the long run. This isn’t just based on the fact that an Arkansas expansion won’t cover many of the new entrants into the system or the increased administrative costs that more health care spending brings. More generally, in the shadow of what promises to be just one of a series of “fiscal cliffs,” we shouldn’t pretend that the likelihood of the federal government keeping its long-term Medicaid promises is 100%.
In the real world, expanding Medicaid in Arkansas will also make our state a magnet for potential Medicaid clients who live nearby, given that at least three of our neighboring states (probably more) will opt out of the expansion. Government estimates of future costs are notoriously bad at taking such real-world variables into account.
Consider the famous 1967 congressional estimate that, in 1990, we would spend $12 billion on Medicare – by 1990, the Medicare budget was nearly ten times as expensive as predicted.
The best way to improve patient outcomes would be to transform Medicaid by integrating the proven success of private health insurance into the existing Medicaid system. As the Advance Arkansas Institute explained in our new book, Action Plan for Arkansas 2013, Florida’s successful reforms flattened Medicaid’s costs by giving Medicaid patients a choice of private managed-care programs.
We need policies that encourage the provision of health care, not the provision of government subsidies – not just because it’s good for taxpayers, but because it’s good for the health of the people.