OEDEL: Should Medicaid grow?

March 31, 2013 

Should Medicaid grow as if it were on super-sizing steroids? It’s a question that states such as Georgia and Florida are pondering these days, thanks to one aspect of the Supreme Court’s Obamacare decision last year.

NFIB v. Sebelius held in part that the feds can’t constitutionally force states to expand Medicaid by roughly 50 percent, extending coverage into the lower middle class and above the federally defined poverty line. The poverty line has historically been the usual Medicaid cut-off, despite having been defined rather uncritically about 50 years ago then left untouched except for inflation.

Above that line, people generally have to rely on their own devices to ensure good health, or else, for illness, find insurance on their own; use emergency rooms by federal law required to accept everyone; pay health providers out-of-pocket; plead for charity; or find other government largesse such as Social Security disability status, Medicare, veteran’s benefits, etc.

In states that accept federal money for expansion, that line will now move up to 133 percent of the poverty line, to about $31,000 of declared income for a family of four. People with somewhat higher incomes are also practically included up to 138 percent of the poverty line, thanks to a grace zone.

Some right-leaning states have indicated that, despite opposing Obamacare, they’ll still take the federal money for Medicaid expansion, initially 100 percent of the added costs, then 90 percent after three years, with no federal promises about federal support after that. The Kaiser Foundation expects that would mean $33 billion in federal money to Georgia over 10 years, with $2.5 billion in new Georgia costs. Even assuming the feds maintain 90 percent funding levels until that decade’s done, Georgia’s number crunchers estimate that Georgia’s extra Medicaid costs until then would be $3.7 to $4.5 billion.

Because there are no promises after the first four years, and Medicaid’s expansion would probably be permanent, the long-run estimates about any state’s share are hard to quantify. Though Ohio Gov. John Kasich claims that Ohio could still withdraw from Medicaid’s expansion after the first few years, withdrawal then would be legally doubtful.

Georgia’s governor, Nathan Deal, like other governors in states expected to decline the federal funds for Medicaid expansion, has generally defended Georgia’s decision on narrow cost grounds alone, i.e., that the state just can’t afford it.

When you have a 9-to-1 federal match, affordability as a rationale raises an eyebrow. Are Republicans just stingy? Do they lack heart? For the most part, Deal hasn’t made the deeper, broader case.

There are serious humanistic concerns about why one should question Medicaid’s expansion. What are the countervailing potential benefits? Would extending Medicaid to the lower-middle class really help those citizens?

If Medicaid’s longstanding demonstrated effectiveness for the sub-poverty-line cohort is some indication, Medicaid’s expansion isn’t necessarily good news.

As things stand now, if you’re eligible for Medicaid, just about all your actuarial health metrics are bad. You’re going to have more illness. You’re going to die younger.

You’re also going to have trouble finding a Medicaid provider. Even before any expansion kicks in, about one-third of doctors won’t take on a Medicaid patient. With a reduced pool of available providers, your options for effective care get narrowed. Those systemic pressures on Medicaid will probably get lots worse if Medicaid’s size gets swamped by growing 50 percent.

It’s not unreasonable for Deal to worry that expanding Medicaid might, like a cancer, extend the sub-par health outcomes of the poorest people into the broader population.

Deal’s right to be concerned that a decision to expand Medicaid could foster expansion of a sick underclass, nailing their members’ coffins shut sooner than if not given reduced incentives to nurture their own health, and then sentenced to rationed, inferior care.

There were some absurd accusations about “death panels” in the original Obamacare debates, questioning whether government and law should support people who choose to die with grace, dignity and peace, without the full-bore techno-medico send-off.

That was a profoundly misguided smear. Yet, ironically, Medicaid’s proposed expansion might really create something not altogether different.

Oedel, a Mercer professor, represented Georgia in the U.S. Supreme Court’s 2012 Obamacare case.

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