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Eagle editorial: Medicaid expansion helps economy

  • Published Thursday, Dec. 12, 2013, at 12 a.m.

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The moral argument for helping low-income Kansans receive health insurance hasn’t worked on Gov. Sam Brownback and GOP state lawmakers. Maybe an economic argument will convince them to do the right thing and allow a federal expansion of Medicaid.

A new study by the Commonwealth Fund noted that Kansas and the 19 other states that haven’t expanded Medicaid will lose out on billions of dollars in federal aid. What’s more, their federal taxes will help pay for the expansion in other states while they get nothing in return.

The study estimated that in 2022, Kansas would lose $767 million in federal funds by not allowing the Medicaid expansion. Assuming all other states eventually expand, Kansas’ share of the cost of Medicaid in the other states (paid through our federal taxes) would be $950 million per year, according to the study.

The Medicaid expansion is part of the Affordable Care Act’s effort to insure more Americans. The federal government pays for 100 percent of the cost of the expansion for the first three years, starting next year, then it phases down its support to 90 percent in 2020 and thereafter.

The 10 percent state share is still significant – Commonwealth estimated it would cost Kansas $108 million in 2022. But that expense leverages about seven times that much in federal funds. It’s also a fraction of the estimated $1.25 billion Kansas will spend that year on incentives and subsidies to attract private businesses, according to the study.

Another study earlier this year by the Kansas Hospital Association estimated that the expansion would inject more than $3 billion into the state’s economy over the next seven years and create 4,000 jobs. It estimated that the expansion would increase Kansas’ gross state product by nearly $1.9 billion between 2014 and 2020.

Expansion also could help lower some state costs by moving some adults the state now cares for, such as those with mental illnesses, onto Medicaid. If the state doesn’t allow the expansion, those costs likely will increase.

Not expanding also will create a major economic hardship for Kansas hospitals. That’s because the Affordable Care Act is scheduled to reduce payments to hospitals that serve low-income uninsured patients (in expectation that many of these patients would be joining Medicaid).

There is also an economic benefit to having about 150,000 more Kansans with health insurance, which should help many of them be healthier and more productive.

Brownback and the Legislature should allow the Medicaid expansion because it would help some of our neediest citizens. If that isn’t enough motivation, they should want to help the state’s economy. Expansion helps both.

For the editorial board, Phillip Brownlee

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