My view: 4 reasons why Gov. Herbert should support Medicaid expansion

By Stephen F. Gold

Published: Sunday, Dec. 2 2012 12:00 a.m. MST

Gov. Gary Herbert has stated his opposition to expanding Medicaid health care to about 180,000 people in Utah. All of these people have incomes of less than $14,859 a year, or $1,238 a month (133 percent of poverty).

Here's four reasons why Herbert should reconsider his position. 1) If Utah expands Medicaid to these people in 2014, then for three years the federal government will pay 100 percent of all Medicaid costs for all 180,000 people and will pay slightly less in years four to seven.

Basically, for the next seven years, it is fully federally funded without a significant financial downside for the state. If the state agrees to expand its programs, then by 2019, Utah will receive more than $4.6 billion in federal funds in return for spending $227 million of state money.

2) Think in business terms: $4.6 billion to $227 million is a terrific rate of return on state funds and a great federal financial stimulus. It is hard to imagine why the governor would refuse a guarantee of this much on his investment, far better than the existing Medicaid federal match.

3) Besides being a business bargain in dollar terms, think about the financial downside if the governor refuses to participate. Utah's citizens will still pay the same amount of federal taxes, but other lucky states will benefit from federal taxes because they have agreed to expand their Medicaid services. Other states benefit from Utah's taxes.

4) When Congress passed the Affordable Care Act, it eliminated the "disproportionate share hospital payments," or DSH, to hospitals that had cared for the bulk of uninsured 40,000 low-income people. DSH payments were the federal incentive for hospitals to care for exactly the same 180,000 people the Affordable Care Act presumed would become Medicaid recipients in 2014.

Without the DHS payments, hospitals will still be legally required to provide hospital treatment for these low-income patients. However, the hospitals will not receive any Medicaid reimbursement for treating these patients because the people will not be in Medicaid — neither the higher reimbursement DSH payments that hospitals had received nor even regular Medicaid reimbursements for hospital care.

Lost DSH payments are huge. Without DSH payments, Utah will lose about $26 million in Medicaid funding per year. This is a train wreck waiting to happen — for low-income patients and the hospitals.

The bottom lines seem clear — expand Medicaid for the 180,000 poorest citizens, get a terrific rate of return and avoid a hospital disaster.

Stephen F. Gold is a national disability and Medicaid advocate. You can email him at Stevegoldada1@gmail.com.

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