Political Horizons: A look at the Medicaid expansion numbers

by mark ballard

Capitol news bureau

Republican-dominated legislatures in eight of the nine states where GOP governors agreed to take the federal monies to expand Medicaid are balking, according to Politico, the national political website.

The latest was Florida, whose Legislature ground to a stalemated end Friday as the Republican-dominated House and Senate refused to go along with GOP Gov. Rick Scott, who wanted the money.

Where Republicans have failed in Congress, at the U.S. Supreme Court and at the ballot box, they apparently succeed by having state legislatures refuse a key component of Obamacare.

Sixteen states, plus Washington, D.C., which are dominated by Democrats, have approved the Medicaid expansion, according to the Kaiser Foundation, a health-care research organization based in Menlo Park, Calif. Twenty-seven states, most of which have Republican-dominated legislatures, have rejected it or are about to, according to Kaiser.

The federal government is offering states incentives to allow more people to qualify for Medicaid, the government-run health insurance for lower-income Americans. Under Medicaid, the work of doctors, hospitals and clinics is paid mostly by the federal government and partially by the states. Louisiana contributes 34.5 percent of the costs, at least until October.

If a state broadens the Medicaid requirements, thereby allowing more people to qualify, the federal government will cover the full costs from 2014 to 2016, and eventually will edge down to paying 90 percent of the costs.

House Republicans and administration officials say “we need good, solid, believable numbers.”

State Rep. Lance Harris, of Alexandria, and chairman of the House GOP caucus, said in a prepared statement that he was concerned that up to 41 percent of the state’s population would be “dumped” into Medicaid by “moving” up to 171,000 residents off private insurance. He repeated Jindal’s estimate of a $1.71 billion “potential cost” after 10 years.

Jindal argues that only about 214,000 people in Louisiana are the uninsured people who would benefit from expansion.

Jindal’s press office says the governor and his allies ultimately rely on a state Department of Health and Hospitals report from January 2012 that excludes those for whom federal “advanced premium tax credits” are available.

The DHH report estimates about 78,000 people annually earn between 100 percent and 138 percent of the federal poverty level. For a family of four that gap is from about $23,500 annually to less than $32,000. The expansion is designed to pick up uninsured adults making up to 138 percent of the poverty level.

Legislative Fiscal Office economists in April pegged the number at about 290,000. But they included those making between 100 percent and 138 percent, the folks who were mostly excluded from Jindal’s headcount.

Another 244,000, who would become eligible under the expansion, already have insurance, according to the Legislative Fiscal Office.

A lot of low-income workers have policies with high deductibles and little actual coverage, therefore, would happily dump their private policies for Medicaid. They are called the “crowd out” population.

Both sides agree some of these people will shift from private insurance to Medicaid. Just how many is the point of contention.

Republican House members put the “crowd out” number at 171,000. Jindal’s press secretary Sean Lansing said last week “that it will move 248,000 individuals off of their private insurance and dump them into Medicaid.” The Fiscal Office estimated between 105,000 and 116,000 would move.

“Crowd out” and physician rates are important in calculating expansion costs to Louisiana taxpayers.

A DHH report predicts if physician rates stay the same over the next 10 years, taxpayers could save up to $367.5 million. If the rates are raised about 40 percent, then over the next decade taxpayers would have to pay $1.71 billion, DHH says.

Jan Moller, Louisiana Budget Project executive director, points out that Jindal and his allies consistently say Medicaid delivers inferior health care. He said getting to the $1.7 billion figure assumes that almost every single person who can, will join a Medicaid system that in the future pays physicians dramatically more.

Mark Ballard is editor of The Advocate Capitol news bureau. His email address mballard@theadvocate.com.