2012 Medicaid Eligibility Expansion
UTAH SHOULD EXPAND MEDICAID ELIGIBILITY
UNDER THE PATIENT PROTECTION AND ACCESSIBLE CARE ACT
Big benefits with limited state costs
The Utah Citizens’ Counsel, after careful consideration, is persuaded that Utah should expand Medicaid eligibility to families and individuals, seizing an extraordinary opportunity found in the recently enacted U.S. Affordable Care Act (ACA). Over 50,000 hard-working, low income Utah residents who lack adequate health insurance are currently ineligible for Medicaid coverage. This regrettable reflection on the state’s public health obligations can be remedied by taking advantage of emergent federal government assistance, principally by increasing the income eligibility up to an annual income of 138 percent ($31,800 for a family of four) of the official poverty level.
LIFE, LIBERTY, and the PURSUIT OF HAPPINESS: Hollow expressions without health insurance
Suppose you’re Ellen, a 33-year-old woman with malignant breast cancer. You hoped you had been cured by removal of your breast two years ago. Your cancer doctor had recommended follow-up chemotherapy to help insure that, but your COBRA coverage had ended. The money for new insurance was needed to care for your mother. So, no chemo. But your cancer came back. Now you are likely to die early from the cancer that might have been avoided if you had been eligible for coverage under Medicaid.
Or you’re Jack, completing your college degree after military service. You and your wife, also in college, have part-time jobs without health insurance. A year ago you had an auto accident. No medical bills were covered. Three months later, as a result of the accident, you developed cellulitis—a severe infection of tissues. You tried to manage the infection without medical care and now have skin ulcers. For these you’ve had repeated visits to the ER. You need a primary care physician to prevent the crises and avoid the costly ER. You could be have this better care under Medicaid expansion.
Or you’re Mary. With your husband, John, you have three young children and an income barely above the poverty level. John works on a yard-work crew. He lost his job as a mechanic two years ago. You have diabetes with its increasing complications. Because neither of you can afford health insurance, you avoid treatments that might improve your health and ability to care for your children. Even though your children are covered by CHIP, your whole family is at risk of financial disaster if either you or John should suffer other illness or accident. The expansion of Medicaid could well prevent such a disaster.
MEDICAID EXPANSION WILL:
1. Benefit Utah by improving the likelihood that more residents (whose current options are to go without or go to an Emergency Room) will seek health care sooner, resulting in earlier diagnosis and treatment, better health care results, and lower health care costs.
2. Fill one of Utah’s most serious health protection gaps. While children in families with incomes below 138 percent of the poverty level are Utah Medicaid and CHIP eligible, parents and childless adults are not. Enacting the ACA provisions statewide would make 42,500 more parents and 10,400 more childless adults Medicaid eligible. These folks are among the most financially stressed and most medically needy of the 377,700 Utahns (2011 figures) lacking health insurance coverage.
3. Share costs reasonably. The federal government would reimburse additional state costs 100 percent from 2014-2016, 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and 90 percent in 2020 and thereafter. Beginning in 2014, the expansion of Medicaid eligibility would add an estimated $152 million in federal health care expenditures in Utah, rising to $463 million in 2023. The estimated 10-year federal contribution to Utah would be $3.6 billion while the estimated cost to the state over the same 10-year period would be $239 million.
4. Stabilize and more fully reimburse health care provider participation. The increased federal contributions will make payments to providers more timely and more reliable.
5. Reduce higher costs to Utahns that result from uninsured patients’ receiving emergency treatment and hospitalization. When a patient is unable to pay the charges for emergency care, the costs are added to the hospital bills of paying patients. Those charges are then paid either by these patients themselves or by their private or insurance. The insurance costs are then covered by our insurance premiums or, if public insurance, by our taxes. In other words, the larger public pays these costs, and in inefficient, untimely ways that lead to poorer health care quality at increased cost.
6. Accommodate the federal presumption that all persons with income below 100% of poverty level will become eligible for Medicaid. Therefore, they will not qualify for federal subsidies to purchase insurance through health insurance exchanges. The extension of eligibility thus avoids leaving a significant number of low-income Utahns without either federal financial assistance or Medicaid insurance.
7. Support the state economy and create the likelihood of a multiplier economic effect.
The costs of Medicaid expansion are not nearly as scary for Utah as some people assume, and many benefits will offset the increased costs. Increased Utah and federal financial attention to early and more beneficial medical care fosters a healthier population and workforce, controlling health costs before they become unavoidable and burdensome, reducing surcharges on other people’s insurance premiums, and providing more efficient, effective health care to a portion of Utah’s citizens who are currently uninsured. Utah and the federal government should work together to assure health care solvency and effectiveness.
FUNDING THE EXPANSION OF MEDICAID ELIGIBILITY
The Legislature insisted that those advocating the expansion of Medicaid eligibility indicate how the state would pay for the expansion. Ultimately, both the opportunity and obligation to extend Medicaid eligibility reside with legislators as they enact state budgets reflecting essential public commitments. Nonetheless, we offer the following funding options for consideration, noting that the question really is how else will Utah finance insurance coverage for our low income families and fellow citizens without even higher state expenditures? Attempts to set up a state program alone are not likely to solve the health care crisis and will cost the state more than the matching federal-state program.
1. Extend the state’s effort to improve lifestyles, disease prevention, and health promotion for all Utahns through increased public health programs because this broader effort can reduce health care costs to offset Medicaid expansion costs.
2. Introduce a staged reduction in the diversion of general fund revenues to highways by increasing the gas tax and other highway user revenues, which were always intended to pay all highway costs. Schedule this reduction to match the staged increase in the state’s general fund costs of Medicaid expansion. (Low-income individuals who would be paying an increased gas tax could be “held harmless” by a new, state-earned income tax credit.)
3. Remove tax preferences (tax expenditures, loopholes, exceptions, exemptions) in the state’s revenues. Among many choices, here are two examples: 1) Remove the preference for oil stripper wells, which was provided to encourage production during tough times in oil producing regions when oil prices were low. Now that oil prices are at record highs, the preference no longer makes economic sense but primarily enriches out-of-state oil producers. 2) Limit the number of income tax exemptions for dependent children of taxpayers with high incomes, making payments for public services, such as education, that are enjoyed by such families more equitable with payments by low income families.
4. Create an independent, nonpartisan commission to review all tax preferences in Utah law and to recommend reductions or removal of unwarranted preferences.
With diligent effort, the Legislature can fund the expansion of Medicaid eligibility. With understanding that improved health care for all Utahns, in particular those unfairly and needlessly denied such aid, is economically and morally justified, the effort is amply defensible. Building on already noteworthy state health care efforts, the Legislature can create an edifice genuinely enviable for its efficiency and effectiveness, conveying net Utah savings and fewer burdensome tax subsidies and insurance premiums. Simultaneously, prospects for improved health care and the economic promise which that implies are significantly enhanced statewide. The moment for achieving these substantive gains is now, the time for benefitting could be infinite. The obligation should be embraced so the opportunity is not lost.