Money fears vs. real benefits in Medicaid choice

By Ricardo Alonso-zaldivar

Associated Press

Published: Monday, Jan. 28 2013 12:00 a.m. MST

States can refuse the expansion outright or indefinitely postpone a decision. But if states think they'll ultimately end up taking the deal, there's a big incentive to act now: The three years of full federal funding for newly eligible enrollees are only available from 2014 through 2016.

So far, 17 states and the District of Columbia have said they'll take it. That group includes three Republican-led states, Arizona, Nevada and New Mexico. Arizona Gov. Jan Brewer was prominent among GOP leaders who had tried get the law overturned.

An additional 11 states, all led by Republicans, say they want no part of it. Perry says it tramples states' rights.

The remaining states are considering options.

In some cases, GOP governors are trying to persuade balky legislatures led by Republicans. Hospitals treating the uninsured are pressing for the expansion, as are advocates for the poor and some chambers of commerce, which see an economic multiplier from the infusion of federal dollars. Conservative foes of "Obamacare," defeated at the national level, want to hold the line.

The entire debate is overshadowed by some big misconceptions, including that the poor already have Medicaid.

Many of them do, but not all. Medicaid generally covers low-income disabled people, children, pregnant women and some parents. Childless adults are left out in most states.

The other misconception is that Medicaid is so skimpy that people are better off being uninsured.

Two recent studies debunked that.

One found a 6 percent drop in the adult death rate in states that already have expanded Medicaid along the lines of the federal health care law. A second looked at Oregonians who won a lottery for Medicaid and compared them with ones who weren't picked and remained uninsured. The Medicaid group had greater access to health care, less likelihood of being saddled with medical bills, and felt better about their overall health.

Skeptics remain unconvinced.

Louisiana's health secretary, Bruce D. Greenstein, is concerned that the Medicaid expansion could replace private insurance for many low-wage workers in his state, dragging down quality throughout the health care system because the program pays doctors and hospitals far less than private insurance. He says the Obama administration and Congress missed a chance to overhaul Medicaid and give states a bigger say in running the program.

"Decisions are made by fiat," he said. "There is not any sense of a federal-state partnership, what this program was founded on. I don't feel in any way that I am a partner." The Obama administration says it is doing its best to meet state demands for flexibility.

But one thing the administration has been unwilling to do is allow states to partly expand their Medicaid programs and still get the generous matching funds provided by the health care law.

That could have huge political implications for states refusing the expansion, and for people such as Walker, the diabetes patient from Houston.

These numbers explain why:

Under the new law people making up to 138 percent of the federal poverty line, about $15,400 for an individual, are eligible to be covered by Medicaid.

But for most people below the poverty line, about $11,200 for an individual, Medicaid would be the only option. They cannot get subsidized private coverage through the new health insurance exchanges.

So if a state turns down the Medicaid expansion, some of its low-income people still can qualify for government-subsidized health insurance through the exchanges. But the poorest cannot.

In Texas, somebody making a couple of thousand dollars more than Debra Walker still could get coverage. But Walker would be left depending on pay-as-you-go charity care.

"It's completely illogical that this has happened," said Edwin Park, a health policy expert with the Center on Budget and Policy Priorities, which advocates for low-income people.

Federal officials say their hands are tied, that Congress intended the generous federal matching rate solely for states undertaking the full expansion. States doing a partial expansion would have to shell out more of their own money.

"Some people are going to be between a rock and a hard spot," said Walker.

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