A few years ago, I attended bankruptcy court on behalf of my employer. Of the large number of newly bankrupt Utahns that came before the court to briefly explain their circumstances, it was clear that many were poor and had been living one paycheck away from financial disaster. Many in this parade of broken people were left insolvent due to illness or medical debt.
The experience was in keeping with national data on bankruptcy. According to a Harvard study, about one quarter of bankruptcies are due to medical bills, and another quarter are the result of an illness or injury. Yet many Utah leaders are hesitant to participate in policies that would help alleviate some of this suffering, the most pressing of which is Medicaid expansion.
The expansion of Medicaid is the correct, just and humane thing to do. It is an essential aspect of preserving our civil society. There are also practical and pragmatic reasons for expansion.
Each state must decide if it wishes to participate in the expansion of Medicaid. Currently, most Medicaid recipients are subject to an income limitation of 100 percent of the poverty threshold. The expansion would increase the income limitation to 138 percent of the poverty threshold and include previously ineligible groups such as adults who are not disabled. Estimates vary, but as many as 100,000 currently uninsured Utahns would likely obtain health insurance through expanded Medicaid. The federal government will pay 100 percent of the cost of this expansion for the first three years, and thereafter the federal share will never drop below 90 percent.
A great deal of medical care is already being provided in Utah, but never paid for by the uninsured recipients. For example, in 2011, Intermountain Healthcare donated medical care to those unable to pay and wrote off medical debts from those unwilling to pay in the combined amount of $470 million.
Under Utah state law, local governments must provide mental health and substance abuse services regardless of whether the beneficiaries can pay. Expanded Medicaid will enable Utah's local governments to collect for services rendered that currently go unreimbursed. That's a key reason why the Republican-dominated Salt Lake County Council voted 8-0 to recommend Medicaid expansion.
Utah has already made the policy decision that emergency and urgent health care services will be provided, regardless of ability to pay. Expanding Medicaid merely formalizes a process that is largely already in place. Expansion will spare Utah health care businesses much of the current disruption and uncertainty of uncollected medical bills. More Utahns will receive preventative health care, thus saving money in the long run. And Utah will receive an estimated $4 billion in additional medical payments over the next 10 years if Medicaid is expanded, thus providing a great economic benefit to Utah. If Utah fails to expand Medicaid, its hospitals will absorb the pain (such as certain Medicare payment reductions), but not the benefits, of the Affordable Care Act.
Republicans are concerned about the federal budget ramifications of the new health care law. They are also concerned that, in their view, Medicaid expansion is being imposed on Utah. But if Utah declines to expand Medicaid, all Utahns will pay federal taxes to fund a program that solely benefits millions of Americans in other states. On many issues, Utah Republicans believe that decisions should be made by Utahns and for Utahns, without regard to whatever may be going on in Washington. This reasoning should be applied to Medicaid expansion. In other words, this decision should be made solely on the basis of Utah's circumstances.
From Utah's perspective, the case for expansion is overwhelming.
Eric Rumple recently retired from a career in corporate finance. He analyzes public policy for the Alliance for a Better Utah.