Medicaid has long been a hot discussion point for Democrats and Republicans, and Medicaid Expansion is a new avenue where the sides are locking horns across all states. The case in point being the support given to Obamacare’s effects through the Medicaid expansion, which will work as a strategy to cover those up to 138 percent of the federal poverty line under the safety net of Medicaid. The expansion would specifically target people that are not being covered under PPACA’s laws and provide quality health and care to the underprivileged. However, the administration has not been able to reach an agreement with all the states on the aspect of Medicaid expansion, and 17 states have chosen not to expand Medicaid for supporting ACA.
There were a couple of reasons behind GOP-led states deciding to not support the Medicaid expansion, the primary one being economics. The 17 states projected that the costs associated with Medicaid expansion were going to be way too high to make sense for expansion. However, by working against Medicaid expansion, these states have put a bigger thing in motion, which experts are calling the ‘welcome mat’ or the ‘woodwork’ effect. Basically, the ‘welcome mat’ effect is the term given to recent surge in Medicaid enrollments in those states where Medicaid expansion is on hold.
The hype surrounding the whole issue of Medicaid expansion has taken people’s interest to a new high, causing previously eligible but unenrolled people to reconsider their position and enroll with the program. In the period between October and March, more than 500,000 people have signed up for Medicaid in its current state, and some of it can be owed to the outreach and marketing efforts made by Obamacare proponents in their agenda to push better healthcare coverage to the masses. Out of the 17 states, Georgia had roughly a 100,000 new enrollees, while North Carolina, South Carolina and Tennessee managed somewhere around 50,000 enrollments each. Considering the stand of states against Medicaid, this percentage increase is pretty high. Naturally, this increase is going to contribute to state expenses in supporting the Medicaid facilities for the newly insured.
Taking the case of North Carolina, where new enrollments have been somewhere around 58,000 in the period from October to March, the increase in costs is going to be crippling for the state. Currently, Medicaid costs come somewhere around $14 billion for North Carolina, and state, federal, and taxpayer money come together to cover the cost. Out of the total cost, $3 billion is covered by the state of North Carolina. In case the state does not go for a Medicaid expansion, the increase in enrollments due to new people would increase the costs to the state to $4.4 billion by 2019. On the other hand, if the state does go for a Medicaid expansion, the federal government would pay for 90 percent of the costs, leaving the state share to be somewhere around $1.4 billion. That is $3 billion saved with a single move – money that could be used for a variety of purposes without putting any pressure on taxpayers.
The costs are not limited to this, there is a lot more in the picture. If the state does not go for expansion, hospitals are going to suffer a loss of $600 million every year. North Carolina Institute of Medicine reports that this loss would come due to caring for people enrolling with the system recently. UNC Health Care is going to suffer a loss of about $85 million in revenue that could well have been used for improving primary care facilities for patients. Although hard numbers are not available for other states currently, the equation is going to be the same across the country. By going for a Medicaid expansion, these states can avail federal help for newly eligible Medicaid enrollees and utilize funding for paying all associated costs for the next three years. Post that, federal government is liable to pay at least 90 percent of those costs, translating into long term benefits for states expanding Medicaid.
In essence, the financial and operational costs on states deciding to continue with Medicaid As Is are going to be debilitating, and simple, pure economics suggests that a better move would be to expand Medicaid. Under the ‘welcome mat’ effect, it makes much more sense for these states to make a move towards Medicaid Expansion and save hard-earned taxpayer dollars that can be utilized in a better way.