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The Governor’s Bad Math on Medicaid

Posted July 9, 2012 by Timothy Sweeney

 

Posted by Timothy Sweeney

A spokesperson for the Governor claimed this weekend that the price tag for expanding Medicaid under the Affordable Care Act would equal 25 percent of what the state currently spends in total.  That claim is flat out false.  Our legislators should ignore this bad math and move forward with the expansion, which is a great deal for Georgia.

The Governor estimates that Georgia would spend $4.5 billion over ten years to expand Medicaid.  That would represent only a 1.9 percent increase in total state spending. This figure is far from the 25 percent the governor’s office claimed over the weekend.  It’s important to note that the federal government will cover 100 percent of the costs in the expansion over the first three years, and no less than 90 percent after that.

Furthermore, the Governor’s $4.5 billion estimate is likely inflated.  The independent, highly regarded Urban Institute estimated Georgia’s costs for the expansion would be $714 million over six years.  Although the Governor’s estimate looks at a longer period of time and includes some cost factors that the Urban Institute’s estimate doesn’t include, that doesn’t explain why it is more than six times bigger than that of the Urban Institute.

It would help to see the Governor’s methodology – but so far he hasn’t released it.  He should.  Then we could be sure that the estimate takes into account other ways that the state would gain revenue and save money as a result of the law.  For example, the state expects to raise $750 million in new revenue from the insurance premium tax (which is collected on Medicaid plans) over this 10-year stretch, yet the figure is not reflected in the $4.5 billion cost estimate often cited by state officials. In addition, if Georgia expands Medicaid, the state could spend less money providing health care in emergency rooms and health clinics to people without insurance.

Of course expanding health coverage to more than 500,000 low-income adults and nearly 100,000 Georgian children has many important benefits.  It will make our state healthier and give our families more economic security.  It also will bring economic gains as billions in new federal funds to hospitals, doctors, and other health providers give our struggling economy a boost.

Statements exaggerating the cost of the Affordable Care Act’s Medicaid expansion should not dissuade the state from moving forward to implement the expansion. The Medicaid expansion is the right choice for Georgia.

4 Responses to “The Governor’s Bad Math on Medicaid”

  1. Leonard Reeves MD says:

    This is exactly what I have seen as read as well. It is obvious that what is going on is that anything that comes from the Obama administration is going to be rejected by conservatives…simply put…

  2. john says:

    If we want to be educated on issues, we need the facts….and stated clearly, with assumptions and methodology laid out.

    Only then can we make educated opinions on the issue. By not doing so, then later saying “…the costs are $4.5 Billion,” is not only misleading, it’s perhaps deliberately so. Designed to mislead, then later be bandied about as fact, with possibly no real basis in fact. If we don’t know what’s behind this number, we have no idea how it was derived.

    Hopefully, legislators will say the same when they get involved in this matter! But, given past history, we sure have to remain skeptical….

  3. Virginia Griffin says:

    I am a 63 year old female who had been without insurance for several years prior to getting the Pre-existing Condition Insurance last year through Obama Care. I pay $470 per month for this insurance. I was so afraid that the Supreme Court would cause me to lose it, and so delighted when they did not.
    I had never been without insurance until recently. I work for a small non-profit agency that cannot afford health insurance for its employees. I am so frustrated with my friends and people I read about in the press who totally do not understand what it is like to be without insurance. I am equally frustrated with my state for its attitude toward this issue.
    I appreciate your keeping the public informed regarding this matter.

  4. [...] of his decision (or lack thereof) on fuzzy math.  Luckily, the Georgia Budget and Policy Institute corrects him, and the Center  on Budget and Policy Priorities has produced a nice primer on how the Medicaid [...]

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