Roadblock to Medicaid Expansion a Threat to Middle Georgia

As published in the Macon Telegraph on February 23, 2014.

What would you think about a new state law that threatens to cost the 11-county Middle Georgia region 3,300 jobs and about $1.8 billion in federal funding over 10 years?

What if at the same time, the Medical Center of Central Georgia – one of the region’s top employers – was facing $113 million in reduced federal funds that help the hospital care for patients without health insurance?

You might wonder why you haven’t heard about such a nightmare of a law, but a story about it was right on the front page of last week’s Sunday Telegraph under the headline, “State GOP leaders double down on Medicaid expansion.”

Georgia lawmakers introduced a bill last week to add a new hurdle to prevent Georgia from expanding health coverage through Medicaid by creating a new requirement for prior approval from the Legislature. Today Gov. Nathan Deal could expand Medicaid himself through the Department of Community Health, but the proposed law would change that.

Why would anyone want to make it harder for 500,000 Georgians to gain access to health care, among them 34,000 people right here in Middle Georgia?

The reason given in last Sunday’s Telegraph story and in the past by state leaders is Georgia simply can’t afford it. Depending on the day and the person speaking, the cost estimates range from $2.5 billion to more than $4 billion over 10 years.

Nonsense. The fact that opponents of Medicaid expansion can’t even agree on a number created to sound scary should tell you there is a problem with the math. First of all, opponents of Medicaid expansion tend to bundle 10 years of state spending into one intimidating number, when Georgia lawmakers typically talk about state spending on an annual basis. That only serves to stifle the conversation. Second, almost three-quarters of the 10-year costs cited by state officials occur seven or more years from now.

That’s because the federal government covers 100 percent of the cost of covering newly-eligible people the first three years, part of a $33 billion influx that could come to Georgia through Medicaid expansion. After that, Georgia’s share of the cost would be capped at 10 percent.

A true balance of the ledger makes it clear Georgia could get a bargain if it expanded Medicaid, spending an average of $35 million a year over the next decade to provide health insurance coverage to 500,000 Georgians. That’s a small fraction of the $4 billion figure that’s been bandied about.

How can the state’s most commonly cited $2.5 billion, 10-year estimate be off by more than $2 billion? Quite simply, it ignores $1.8 billion in new revenue that would result from expansion, according to projections by both Gov. Nathan Deal’s office and Georgia State University research.

Georgia’s cash-strapped local governments and school districts would also gain about $1.2 billion in new sales tax revenue over the next decade.

Accepting the $33 billion in federal money offered through the federal health care law would send an economic jolt throughout the state that would boost state income and sales tax collections by more than $1 billion, according to a GSU study.

 Revenue from premium taxes paid by health insurers would grow by $750 million over 10 years, according to the forecasts used by Georgia leaders to project new state spending.

I know all these references to millions and billions can cause eyes to glaze over, so let me put the cost of Medicaid expansion in the context of our $20 billion state budget for next year.

New spending to cover 500,000 uninsured Georgians would amount to about a 1 percent increase. Take into account projected revenues and the net cost of expanding Medicaid in Georgia would represent less than two-tenths of a percent of total state spending.

The significant new federal spending that accompanies the modest state investment is crucial to the hospitals that already treat many people who can’t afford to pay for care. When they show up in emergency rooms, hospitals are often required to treat them, under a federal law signed by the late President Ronald Reagan.

Georgia’s failure to extend Medicaid coverage to about 500,000 of its people is a hardship on its working poor, typically restaurant workers, landscapers and other service employees.

Children living in poverty can qualify for health coverage through Medicaid and PeachCare and older Georgians qualify for Medicare. But half of Georgia’s working-age adults below 138 percent of the poverty level, which is $27,300 for a family of three, go without health coverage.

What makes this month’s legislation even more puzzling is Medicaid expansion is the only proposal on the table to pay for that obligation. Passing this law leaves Georgia without options.

Why would anyone want to do that?

Tim Sweeney is director of health policy for the Georgia Budget and Policy Institute.

 

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