Monday, 16 February 2015 00:00

Study Backs Kentucky Medicaid Expansion

Written by Abbu Goodnough | The New York Times

WASHINGTON — Gov. Steven L. Beshear of Kentucky released a study Thursday predicting that his expansion of Medicaid under the Affordable Care Act would generate a positive fiscal impact of nearly $1 billion for the state over the next seven years.

The findings from Mr. Beshear, a Democrat, countered a drumbeat of Republican warnings that extending the program to nearly 400,000 additional Kentuckians to date — far more than state officials had predicted — would eventually impose a heavy burden on state taxpayers. For every state that decides to expand Medicaid under the new law, the federal government will cover the full cost through 2016, but then gradually lower its share to 90 percent by 2020.

According to the new report, by Deloitte Consulting and the University of Louisville’s Urban Studies Institute, Kentucky’s cost of covering the new Medicaid enrollees will start at $74 million in 2017 and grow to $363 million by 2021.

Like most states, Kentucky already spends more of its budget on Medicaid — about $1.9 billion in the 2014 fiscal year — than almost anything else. But the report found that the expense of covering the new enrollees would be more than offset by the positive economic effects of expanding the program. They include new Medicaid revenue to health care providers — totaling more than $1 billion in 2014 alone, according to the report — and the resulting creation of jobs in health care and other professions.

“Kentucky can indeed afford to take care of its people,” Mr. Beshear said at a news conference in Frankfort, the capital, where he spent more than an hour going point by point through the report. “Medicaid expansion is working, and it’s paying off, literally.”

A Gallup poll released last summer found that Kentucky’s uninsured rate had dropped more than that of any other state except Arkansas since the coverage provisions of the health law took effect in January 2014. The Deloitte report found that Kentuckians who qualified for Medicaid under the expansion sought medical treatment at a significantly higher rate than pre-existing enrollees, especially for chronic conditions like high blood pressure, diabetes and depression.

The report may help frame debates over whether to provide Medicaid to more low-income adults in some of the 23 states that have not yet done so. Mr. Beshear, a vocal champion of the Affordable Care Act, said it was the first detailed assessment of the financial effect of Medicaid expansion on a state.

But Jim Waters, the president of the Bluegrass Institute for Public Policy, a libertarian think tank in Bowling Green, Ky., said that the numbers in the report could not be trusted and that it was too soon to know the long-term financial effect.

“We hear this sort of thing from government all the time: This or that company is going to bring 500 new jobs paying $80,000 each. But it ends up being 100 jobs at $30,000 each,” Mr. Waters said. “Government doesn’t really know.”

He added, “By the time the bill comes due, this governor and his administration will be sipping fruit juice on the beach somewhere in retirement, and the taxpayers will be left holding the bag.”

Mr. Beshear will leave office at the end of this year because of term limits.

Kentucky initially predicted that fewer than 200,000 people would join the Medicaid rolls in 2014 under the expansion. Instead, 375,000 did so, and the number has since climbed to 388,000. Unlike with the private plans offered through the new online insurance exchanges, which are offered only during federally designated enrollment periods, people can sign up for Medicaid at any time.

Medicaid sign-ups in Kentucky under the Affordable Care Act have far outpaced sign-ups for private exchange plans. Nearly 100,000 people had enrolled in private plans through the state’s exchange, Kynect, as of Feb. 5.

Link to original article from The New York Times

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