Gov. Sam Brownback has been questioning whether the state can afford to allow a federal expansion of Medicaid. But given how much it would help the state’s citizens, hospitals and economy, Kansas can’t afford not to expand.
The Kansas Department of Health and Environment commissioned an independent analysis of the budget impact of expanding eligibility for Medicaid as part of the Affordable Care Act. It projected that the expansion would cost the state an additional $600 million over 10 years, or an average of $60 million a year.
That’s a lot of money, especially when last year’s tax cuts have created a large budget shortfall. But the state would get much more than that in return.
First and foremost, about 226,000 Kansas children and adults would gain health insurance, according to the KDHE report (151,000 newly eligible, and about 75,000 who are already eligible but haven’t signed up). Not only would this help them be healthier and more productive, it would save lives. Researchers from the Harvard School of Public Health found that for every 176 adults who receive Medicaid coverage through expansion, one death is prevented.
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Increased federal funding also would provide a significant economic boost. The Missouri Hospital Association estimated that Medicaid expansion could add $9.6 billion to Missouri’s economy and create 24,000 jobs. In fact, some argue that the taxes generated by these new jobs would be enough to pay for the cost of the expansion. The Kansas Hospital Association expects to release its own study this week on the expansion’s impact on Kansas.
Expansion also would help lower some of the state’s costs, such as by reducing emergency room visits and bringing some Kansans with mental illnesses into Medicaid.
And not expanding Medicaid would create financial problems. That’s because the ACA reduces payments to help hospitals that serve low-income uninsured patients (in expectation that many of these patients would be joining Medicaid). Without the expansion, hospitals and doctors won’t be reimbursed for some of this care – which likely would lead to job cuts or higher rates for everyone else.
There also are ways to help pay for the expansion and protect the state if, as Brownback fears, the federal government reneges on its funding promises. Arizona, for example, plans to tax hospitals and insurers (similar to what Kansas does with nursing homes) and to include a “circuit breaker” that automatically rolls back Medicaid eligibility if federal reimbursement rates decrease.
Brownback is under pressure from some libertarian groups not to allow the expansion based on ideological objections. But there is a reason why other GOP governors have decided in recent days to allow the expansion: It makes sense – both in dollars and lives.
For the editorial board, Phillip Brownlee