Medicaid expansion can be managed
Expanding Medicaid for West Virginia’s most vulnerable citizens was the right thing to do, despite the ever-present threat that the federal government could scale back its commitment to the program, as many Republicans warn could happen.
Gov. Earl Ray Tomblin acknowledged as much during a press conference last week when he announced the decision that will effectively provide insurance coverage to about 91,500 state residents. “We must carefully watch federal efforts. If the program becomes unsustainable, particularly after three years, or the federal government changes its promised funding allocations, we must be prepared to take action to protect our state.”
That the federal government might sidestep its obligations to the program after three years is not an unreasonable conjecture, however remote. As Attorney General Patrick Morrisey noted during a Town Hall meeting in Charles Town this week, the sequester is likely only the “tip of an iceberg” with many in Washington still behaving like the ghost of Wizard Clip, hunting for something to shear off (although Senate Democrats are sensibly bucking a proposal by President Obama to limit cost-of-living increases to Social Security), despite a report from Goldman Sachs that demonstrates the federal budget deficit is showing steep declines, 4.5 percent of GDP in the first part of the year to more than 10 percent in 2009.
But not expanding Medicaid would have cost the state far more than the threat of the federal government backing out. While improved coverage is no guarantee of better health care outcomes, — a frequently cited pilot program in Oregon has amply demonstrated that — not having insurance coverage surely is a sure fire path to worse outcomes, making it likely the uninsured won’t seek care at all except in emergency rooms. And it’s behaviors like these that drive up costs for the rest of us to the tune of about $1,000 annually for a family policy, according to a Highmark Blue Cross/Blue Shield of West Virginia estimate.
And despite projections that expanding Medicaid would imperil economic development for businesses, the reverse is likely true. By enrolling more workers into the Medicaid program, businesses could avoid penalties that estimates project at between $6 million to $18 million per year for sending employees to the federal health care law’s insurance exchange. And the addition of $3.7 million for the first six years of the expansion will mean more money spent on health care activity, even as families and businesses save to meet other expenses.
To be sure, the expansion will cost West Virginia money. Taxpayers will pay about $5 million a year in the first three years and about $65 million a year by 2020. It’s for that reason that Tomblin has sought a number of measures to rein in costs, applying managed care to mental health and substance abuse treatment and co-payments for some. Still, in the first six years of the expansion, West Virginia is expected to increase its spending to cover newly enrolled adults by just 2.4 percent to 3.2 percent more than what it would have spent without the expansion.
At Monday’s meeting, Morrisey noted the state has much to do to prepare for the upgrade. And indeed it does. The state’s Bureau of Medical Services under the Department of Health and Human Resources, which administers the program, is woefully understaffed to handle it as it is now and will need to be more responsive.
West Virginia has some of the worst health outcomes in the nation and ranks first in obesity, diabetes, adult smoking and heart disease deaths. While expanding Medicaid does not ensure these terrible realities will diminish appreciably, the means to pay for them almost certainly will. And that makes them an effort worth pursuing.