Printed on: February 08, 2013
Every reason to expand
Dr. Kenneth Krell
Expanding Medicaid to Idaho's working poor will save money and lives, writes Dr. Kenneth Krell in the second installment of a three-day series.Currently, Idaho's counties are responsible for the first $11,000 of treatment costs for those who need medical care, can't pay for it and don't qualify for federal aid. The state pays the remainder. The costs of Idaho's Catastrophic Health Care Fund are expected to increase from the current $67 million to $92 million annually by 2020. The Milliman Report commissioned by the state predicts 90 percent of those dollars would be saved if Medicaid is expanded under the Affordable Care Act. Additional savings accrue through Medicaid coverage for patients currently served by Health and Welfare behavioral and public health funds.
Milliman predicts total savings over the next 10 years of $232.4 million with acceptance of the Medicaid expansion. As Milliman's Justin Birrell explained, when all costs are added, "On a purely financial basis, it would make sense to expand. You save $6.5 million if you expand. It would cost you $284 million if you don't. The state and local offsets are what's very unique to Idaho." (That is the county indigent and state CAT funds.)
Other financial benefits accrue as well. As Gov. C.L. "Butch" Otter's work group on Medicaid expansion pointed out, new business will come to the state as a result of a healthcare system in place for low-income Idahoans. The added $9.24 billion in federal funds coming into the state will have a multiplier effect. The Idaho Hospital Association predicts 16,000 new Idaho jobs, with $615 million in sales, property and income taxes over the next 10 years.
In addition, Idaho hospitals will suffer financially if no expansion occurs, many of which, particularly in rural areas, struggle to stay afloat. The PPACA contains a unique provision whereby payment reductions will occur to hospitals that have been previously reimbursed for uncompensated care. The New England Journal of Medicine said payment reductions will occur in the "Disproportionate Share Hospital" programs, which have reimbursed hospitals $22 billion annually for uncompensated care. The feds assumed that since hospitals would have less uncompensated care because of the Medicaid expansion those dollars weren't needed. But if the state refuses the expansion dollars, Idaho hospitals will be left holding the (empty) bag.
But more important than the dollars, if Idaho refuses Medicaid expansion, lives will be lost. An analysis of states that have expanded Medicaid eligibility since 2000, published in the NEJM, compared three states with expansion (New York, Maine, and Arizona) and compared mortality in surrounding states with restricted eligibility. Mortality decreased by 19.6 deaths per 100,000 adults, a relative reduction of 6.1 percent. Increasing access to care and providing earlier care for chronic conditions, and providing preventative services, could translate into 311 lives saved each year in Idaho. Tomorrow, we'll consider the ramifications for the working poor if Idaho chooses not to expand Medicaid coverage.
Krell is a physician in Idaho Falls.