Healthcare Reform - Expand Medicaid and Save The State's Budget

February 21, 2023

Feb 21, 2023

Good Day Healthcare Advocates

I am so thankful for all of you and for the actions you take to move us towards a universal healthcare system. Some of the topics in work are:

The current state of healthcare providers and the potential impact of Universal Healthcare on them
How Universal Healthcare affects the insurance industry (it’s not what you think)
Rural healthcare challenges
Hospice Fraud revisited - this is worse than was reported

Please send topics to me via the chat button and I will research and report. If you need assistance in other ways, lectures, presentations, etc. Just let me know, I’m happy to help.

Current State - Medicaid Expansion - What’s Going on Here?

Medicaid is a federal health insurance program administered by individual states for the benefit of low income Americans. We have written a little about it in previous weeks. It has an enormous impact on rural communities especially those who did not expand Medicaid. You can learn more here.

About 22% of the population receives healthcare through Medicaid. The program is administered by the Center for Medicare and Medicaid Services (part of HHS). It is structured as a State-Federal Partnership. States have the ability to structure their program to best meet their states needs, subject to federal review. The federal matching funds for the program vary dramatically from 50% to 75% depending upon the economic conditions in the state. Worth noting that for new enrollees under the ACA Medicaid Expansion the Federal government pays 90% and the state pays 10%.

It’s like a giant laboratory with 50 states providing healthcare 50 different ways. Although most delivery systems look something like a managed care system.

According to the summary by the Kaiser Family Foundation Medicaid covers nearly half of all births in the typical state; 83% of poor children; 48% of children with special health care needs and 45% of nonelderly adults with disabilities (such as physical disabilities, developmental disabilities such as autism, traumatic brain injury, serious mental illness, and Alzheimer’s disease); and more than six in ten nursing home residents. States can opt to provide Medicaid for children with significant disabilities in higher-income families to fill gaps in private health insurance and limit out-of-pocket financial burden. Medicaid also assists nearly 1 in 5 Medicare beneficiaries with their Medicare premiums and cost-sharing and provides many of them with benefits not covered by Medicare, especially long-term care

As mentioned above, states were allowed to expand Medicaid coverage to those whose incomes were 138% of the Federal Poverty Limit by the ACA and the cost to the state would be 90% covered by Federal matching funds and 10% by the state. 11 states chose not to do so.

They are: Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina,Tennessee, Texas, Wisconsin, Wyoming.

Several years have passed now since Medicaid expansion started via the ACA. A recent analysis by the Commonwealth Fund found that states can expand Medicaid and often do so without impacting the state’s general fund. Let’s look at that.

There are several ways that states paid for their Medicaid expansions, that are worth noting. First, there were savings to their budgets from outside Medicaid. These included mental health and substance abuse care, health care in the corrections system, and helping facilities with uncompensated care. These varied from a few percent of the cost of the expansion to over 30% of the cost of the expansion depending on the state. Then by placing patients in the correct categories included in the expansion states were able to reduce their traditional Medicaid budgets by 4.4% to 4.7%. Lastly, states have an option to place special taxes on healthcare related items such as nursing homes, hospitals, insurers to pay only Medicaid related expenses. Every state does this.

Montana was a success story with these techniques putting aside 123% of the cost of expansion.

So was Michigan, coming up with 169% of the cost. In fact in Michigan, they are not allowed to expand Medicaid unless they fully cover the costs without affecting general revenues.

Virginia did as well saving and raising more than twice what they needed to cover more low income people and keep their population healthy.

It’s worth noting that when Medicaid expands it often creates tax paying jobs to handle the increased patient load from which the state also benefits. That’s not included above.

Let’s remember something. Universal healthcare started as a way to make sure workers and their families were healthy and industry kept humming along and the economy growing. If workers continue to fall by the wayside, the economy, and all of us will suffer.

Until we have Universal Healthcare we need to make sure as many people as possible have access to healthcare. Medicaid Expansion is one way. Let’s get this done!

What You Can Do

If you live in one of Medicaid non-expansion states use this link to find your state representatives and senators email addresses. If an email is missing use your state legislature’s website. Those states are Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina,Tennessee, Texas, Wisconsin, Wyoming. You can cut and paste the text below and send it to your state representatives.

“ My name is _____________and I am your constituent in _____________zipcode. I understand our state has not expanded Medicaid. This may be because there is a concern that expanding Medicaid to individuals with an income of 138% of the Federal Poverty Limit would break the state’s budget. There are a number of states that have successfully expanded at no cost to the general fund. The Commonwealth Fund has analyzed how states have done this successfully. Here is a link to their analysis. https://www.commonwealthfund.org/publications/issue-briefs/2020/may/impact-medicaid-expansion-states-budgets.

You can help our people who need it and all of us can benefit. Thank you”