April 13, 2013

Southern states fight Medicaid growth

Governors decry the growth of government programs but are considering a private solution.

By TONY PUGH McClatchy Newspapers

(Continued from page 1)

Problems Medicaid users face in the south
click image to enlarge

Coastal Mississippi residents wait in line outside the Bethel Free Health Clinic in Biloxi, Miss., on March 19 in order to be one of the dozen or so that will be seen by the volunteer staff. The clinic opened following Hurricane Katrina and continues to provide services.

Amanda McCoy/Biloxi Sun Herald/MCT

The Republican governors of Florida and Arizona already have dropped their opposition.

Some states such as Arkansas, Oklahoma, Tennessee and Nebraska are inquiring whether health care overhaul dollars may be used to expand private coverage rather than Medicaid.

"From a social or humanitarian perspective, you could argue Medicaid expansion is a winner. But from a purely financial perspective, it's clearly a loser," said Charles Blahous, a senior research fellow at the Mercatus Center, a market-oriented research center at George Mason University in Virginia.

Next to education, Medicaid is the largest expenditure for most states, and many Republican governors fear that an expanded Medicaid base would crowd out spending for other vital services.

"I continue to believe that Mississippi should not expand Medicaid because doing so would result in tax increases for hardworking Mississippians or cuts to critical spending in areas like education, public safety and economic development," Gov. Phil Bryant said in a recent statement.

From 2003 to 2012, Mississippi spent more than $9 billion on Medicaid and the state's poor health indicators have remained unchanged or worsened, Bryant spokesman Mick Bullock said.

"The data show that throwing money at the issue -- money the state does not have -- is not working," Bullock said in an email. "So why would we throw even more money we don't have at the issue and expect some miraculous change in outcomes?"

Instead, he said, Bryant has focused on promoting personal health responsibility, recruiting more doctors and fighting teen pregnancy to reduce low-birth-weight babies.

Experts say all expansion states probably will see their Medicaid rolls grow as working poor adults stop paying for job-based health coverage when they realize they now qualify for Medicaid.

States also will incur additional costs due to a likely enrollment spike among adults who are currently eligible for Medicaid but aren't signed up.

Overall, Kaiser estimates that if the nine anti-expansion Southern states dropped their opposition, their Medicaid spending would rise 3 to 7 percent from 2013 to 2022. But those spending hikes would be partially offset by savings for hospital indigent care, since more now-uninsured patients would have Medicaid.

Higher state spending on Medicaid also would bring states more than 10 times as many federal dollars, which could bolster the state economy and help create jobs.

By 2022, Kaiser estimates, while Mississippi would spend an additional $1 billion to expand Medicaid coverage, the federal government would pay $14.5 billion of the costs. Other states would enjoy similar windfalls.

Blahous countered that even though the states' costs are small, "it's a fiscal push in the wrong direction right at a time when the states can't very well afford it."

Medicaid has never been an easy political fit in the South. When the program launched in 1966, states such as Alabama, Florida, Mississippi and North Carolina were among the last to opt in. Critics at the time called it "socialized medicine."

Over time, as other states used Medicaid waivers and enrollment expansions to cover different groups, such as single adults and childless couples, Southern states largely have chosen to invest in public safety-net hospitals where poor, uninsured patients can get indigent care subsidized by taxpayers.

"But most of the issues Southern states are facing -- obesity, diet, lack of exercise, smoking -- are things that public hospitals don't do very well," Emory's Thorpe said. "They aren't designed to provide good primary care and prevention."

That's what Medicaid is supposed to do.

It might take a Southern state such as Arkansas, with a Democrat in the governor's mansion and Republicans controlling the legislature, to make Medicaid expansion palatable in the South and in other pockets of resistance.

Arkansas, which ranked 48th in health outcomes in the United Health Foundation survey, wants to use federal tax credits to pay for private insurance to cover the newly eligible Medicaid population. It would cost the federal government more, but it appeals to Republicans who oppose growing entitlement programs.


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