New Report: “We can’t afford it” objection proven wrong

New Report: “We can’t afford it” objection proven wrong

When the U.S. Supreme Court ruled in 2012 that the federal government could not mandate that states expand Medicaid under the Affordable Care Act, every state had a decision to make.  Should they take federal money to pay for 100% of the cost of expanding their Medicaid programs to all their citizens up to 138% of the poverty level (the federal contribution would slowly decrease to 90% of the cost); or turn down the federal money and allow tens of thousands of their low income citizens fall into the health insurance coverage gap.  Those in the coverage gap remain uninsured because they don’t qualify for the state’s existing Medicaid program but do not make enough to qualify for premium assistance in the Health Insurance Marketplace established under the Affordable Care Act.

South Carolina chose the latter path.

Our elected leaders publicly based the rejection of federal dollars on two points.  First, they said we could not afford the eventual state match of 10% of the expansion cost. This seemed to be a reasonable concern of fiscally-minded public officials.

Consequently, those of us in the Close the Gap coalition who supported providing affordable health insurance to our low income (mostly working) citizens had to argue that it was good public policy for all South Carolinians to be insured even if we had to spend some additional taxpayer dollars to do it.

We even advanced our own economic argument.  We pointed out that tens of thousands of new jobs would be created if we accepted the federal dollars.  We argued that small businesses would benefit from their low-income workers being healthier and thus more productive.  We also included the fact that everyone’s health insurance premiums, including those paid by small businesses, would be more stable from closing the coverage gap.  The state government’s own actuarial firm had acknowledged that we could better control health insurance premiums by reducing the number of uninsured which would then slow and hopefully stop the shifting of costs of health care for the uninsured to the insured.

None of this advocacy has moved our elected leaders to change their minds about taking care of  our citizens who fall into the health insurance coverage gap by accepting the $4.7 million a day being offered by the federal government.  “We can’t afford it” is still the mantra of the opponents.

Now that opposition talking point has been exposed as false.

The Robert Wood Johnson Foundation, a 40-year old highly respected organization, has released a report documenting exactly what the fiscal impact has been on states that took the path of accepting the federal dollars to provide health insurance to their low income citizens.

According to the report, Arkansas and Kentucky have saved enough state dollars by expanding their Medicaid programs to completely pay for any additional costs well into the future.  The savings resulted from these Southern states replacing state dollars that were paying for “mental and behavioral health programs, public health programs, and inpatient health care services for prisoners” with the federal dollars.

What this report did not include was all the additional revenue from the new jobs created from the federal money flowing into their states.  Every new job means additional tax receipts for the state.

Closing the health insurance coverage gap by accepting the federal dollars not only has not cost Arkansas and Kentucky any tax dollars; it has also clearly been an economic boon to the states.

Now to the second point raised by South Carolina opponents of accepting the federal dollars.  Governor Nikki Haley’s former director of Health and Human Services and chief mouthpiece for rejecting the federal money, Tony Keck, very effectively advocated the position that the goal of the state was to make our citizens healthier.  He argued that closing the coverage gap was an inefficient way of achieving that goal.

However, in December of 2013 I attended a forum at the University of South Carolina at which Mr. Keck explained that having health insurance was not a good predictor of health outcomes. Therefore the state, instead of providing affordable health insurance to low income citizens would do better in promoting health by concentrating on education and jobs while encouraging our citizens to make better personal choices about their behavior.

When recognized to speak I asked Mr. Keck if a low income person would not have a better health outcome if they had Medicaid than one without the health insurance.  Mr. Keck responded that of course the person would be better off with Medicaid than without it.  “But at what cost,” he added.

The healthy outcomes argument by opponents has always been a smoke screen.  Spending South Carolina taxpayer dollars was the real objection.

Now we know what the cost in state tax dollars will be if we close the coverage gap.

NOTHING!

In fact, more jobs will be created adding even more revenue to the state’s coffers to invest in other needs like education and infrastructure.

Let us do the right thing for our uninsured, low income citizens and our economy at the same time.  Accept the federal money and close our coverage gap.

(Mr. Keck now works for a Tennessee hospital and is an advocate for accepting federal dollars to close the coverage gap in that state.)