Want to know what's happening next in healthcare?

MedCityNews is the leading online news source for the business of innovation in healthcare.


“MedCity news is a peerless national resource for those of us who really want to stay on top the very latest news in healthcare from incumbents to startups. ”

Elliot Menschik, DreamIt Ventures partner; Venturef0rth founder; Penn professor


Sign up for our daily newsletter


Heritage Foundation: Medicaid expansion will cost Oklahoma $484M through 2017

March 17, 2013 9:34 am by | 2 Comments

Oklahoma buffalo

TULSA, OK - Oklahoma would end up absorbing $484 million in additional costs through 2017 if it expands its Medicaid program under the Affordable Care Act, according to a report from the Heritage Foundation.

"Medicaid needs reform, not expansion," said Nina Owcharenko, director of the Center for Health Policy Studies at the Heritage Foundation.

The report is the latest in a blizzard of reports estimating various cost impacts from the Medicaid expansion plan. Proponents and opponents of a key element of "Obamacare" have argued the expansion would either cost states millions or save them money.

The Heritage Foundation report compares the potential costs of new benefits and administrative costs for a Medicaid expansion to the potential savings from uncompensated care funded by state governments.

Advertisement

A handful of states would be net winners in that comparison. New York -- saving a total of $33.8 billion through 2017 -- would be the biggest winner. Eight other states would save a total of $14.2 billion, but all the remaining states, including Oklahoma, would end up net losers -- to a total of $37.9 billion -- from Medicaid expansion, according to the report.

Medicaid expansion is a key element of the federal Affordable Care Act's effort to expand health-care coverage for virtually all American citizens.

Any person under age 65 in a household earning up to 133 percent of the federal poverty level -- currently, $31,322 for a family of four -- would be eligible for the medical entitlement program.

While the federal government would cover 100 percent of the costs of new benefits during the first three years of expansion, increased administrative costs would still have to be absorbed by states, which also would get an increasing share of the benefit costs starting in 2017. The state's share would cap at 10 percent in 2020.

The June U.S. Supreme Court decision that found the Affordable Care Act substantively constitutional also made participation in the expansion optional for states.

Gov. Mary Fallin has rejected the Medicaid expansion proposal, arguing that the costs are potentially disastrous.

"This report and others like it reinforce the common-sense notion that an expensive entitlement cannot be expanded to 200,000 new recipients without a significant cost," said Fallin spokesman Alex Weintz. "Expanding Medicaid in Oklahoma as proposed under Obamacare is unworkable and unaffordable. It cannot be done without jeopardizing funding for other priorities like education and public safety."

A January study by the Kaiser Commission on Medicaid and the Uninsured shows the proposed Medicaid expansion would mean a $689 million increase in state Medicaid costs between 2013 and 2022. The same report also shows Medicaid expansion would mean the state would save $205 million in uncompensated hospital care costs -- a net fiscal impact on the state of $485 million over the 10-year period.

As an alternative to the Affordable Care Act, Fallin has proposed her own "Oklahoma Plan," which includes funding for infant mortality prevention and mental health programs, a law to allow local governments to strengthen local smoking regulations and a study of other alternatives. The Oklahoma Senate subsequently killed her smoking proposal until 2015.

"The governor remains committed to working on affordable, state-based solutions to improving health outcomes in Oklahoma," Weintz said Friday.

In an online commentary on the Heritage Foundation's report, Owcharenko said proponents have used a variety of unrealistic arguments to support their position, including that uncompensated care costs of the state would offset increased Medicaid expenses.

"Over time, however, in the majority of states, Medicaid spending will accelerate and dwarf any projected uncompensated care savings," she wrote.

Also, she said, the belief that Medicaid expansion will reduce the number of uninsured people and reduce uncompensated care is contradicted by what happened in Maine, where an expansion in state-funded health-care coverage for the poor led to more uncompensated care and a limited reduction in the number of uninsured poor people.

"Any positive assumptions about Medicaid expansion also assume that federal funding remains unchanged," Owcharenko wrote. "With deficits running over $1 trillion a year, the country's fiscal future is in need of reform. Federal spending on health care entitlements, including Medicare and Medicaid, is the largest driver."

She encouraged states to reject the Medicaid money, scale back existing programs and move forward on alternative plans.

"Greater dependence on federal dollars tangles the states in bad fiscal policy and bad health care policy," she wrote. "States that reject the expansion avoid relying on unsound federal revenues, stretching an already thin program beyond its means and adding millions to a failing program."

Wayne Greene 918-581-8308

[email protected] ___

Copyright 2014 MedCity News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

By GREENE, WAYNE

Visit website | More posts by Author

2 comments
phillytechnews
phillytechnews

@medcitynews That's the dirty secret: all the money in healthcare act not at Federal level, but mandated to states

Hear the latest news first

Get our daily newsletter or follow us.

Advertisement