Psst, red states. Obamacare Medicaid expansion saves people money

As more states led by Republicans slowly join the ranks of those widening the base of people eligible for Medicaid, it’s becoming clearer that the action is good for the state and good for ordinary citizens. They gain insurance coverage, and they spend less on insurance.

Now a new study from Health Affairs puts dollar figures to those facts. If you live in a state that opted not to expand and you would have qualified for Medicaid under an expansion, your state’s decision is costing you. You’re paying more than twice as much money for health insurance. An average of $1,948, compared with $938.

The number of states that have expanded Medicaid is now up to 28, plus the District of Columbia. Indiana is the latest to join what has become the majority of states in accepting the federal subsidies that accompany the revised definitions of who is eligible for the public health insurance program. (The Health Affairs study used figures as of December 2014, before Indiana joined the ranks of Medicaid expansion.)

And what did the study find? First, in states that did not expand Medicaid under the Affordable Care Act, uninsured adults who would have been eligible for Medicaid with incomes at or above the federal poverty level still qualify for health insurance exchange premium tax credits and plans with generous benefits. The Health Affairs study compared estimated out-of-pocket spending for care and premiums, as well as other related costs, for families of such adults under two simulation scenarios. It compared costs for those getting covered through an ACA silver plan with subsidized cost sharing with costs for those enrolling in expanded Medicaid.

“Compared with Marketplace [insurance exchange] coverage, Medicaid would more than halve average annual out-of-pocket spending ($938 versus $1,948), while dramatically reducing the percentage of adults in families with out-of-pocket expenses,” the study said. “Larger reductions would be seen for families with smokers, who under Medicaid would no longer be subject to Marketplace tobacco user surcharges. Medicaid expansion may offer a greater opportunity than access to Marketplace insurance to promote the financial well-being of previously uninsured low-income adults.”

Imagine: You’re an uninsured adult under age 65 and you don’t have much income. If you live in a state that expanded Medicaid, you can get coverage at a fairly reasonable rate. If you live elsewhere, you’re screwed. The Health Affairs study conclusion: “Medicaid expansion may offer a greater opportunity than access to Marketplace insurance to promote the financial well-being of previously uninsured low-income adults.”

Here’s a quick map of where each state stands, courtesy of the Kaiser Family Foundation, also compiled before Indiana expanded Medicaid. It’s easy to see a pattern.

current-status-of-the-medicaid-expansion-decisions-healthreform3

Note that some states say that Medicaid expansion is “under discussion.” In other states, such as Texas, hospitals still are pressuring state government to expand Medicaid, although both the last governor, Rick Perry, and the new governor, Greg Abbott, both basically said, “Over my dead body.” So Texas hospitals continue to lose money by delivering uncompensated care — costs ultimately borne by taxpayers anyway — and state residents continue to pay more or stay uninsured.

The Kaiser Family Foundation came to the same conclusion as the Health Affairs study and also brought up another point. “In states that expand Medicaid, all legal residents with incomes up to four times the poverty level are eligible for financial assistance if other coverage is not available. In states that do not expand, some uninsured people (particularly children) are already eligible for Medicaid or CHIP, though many adults below poverty will fall into a ‘coverage gap’ with no assistance.”

We all know why states are being so stubborn. GOP governors and legislators would have to admit that something about Obamacare actually works, and is working well. When Indiana Gov. Mike Pence announced the change in his state, he had to do triple flips in verbal gymnastics to avoid giving any credit to the ACA.

Pence’s office “didn’t mention the Affordable Care Act when announcing the plan, which will cover up to 350,000 low-income Indianans,” said an online report posted on Talking Points Memo. “When Pence’s PR team tweeted a timeline of the state program being used to expand Medicaid in that state, they skipped over the 2010 passage of Obamacare. But Pence has accepted Medicaid expansion dollars authorized by Obamacare to pay for this alternative plan — which the Obama administration had to approve.”

And what will happen when the U.S. Supreme Court takes up King v. Burwell? This challenge to the ACA is trying to get the court to rule that people getting insurance subsidies in states that don’t have their own health insurance exchanges should not be eligible for any subsidies, basically destroying the intent of the law. If that’s what the court rules, some 8 million people would lose their subsidized coverage and no doubt would become uninsured once again. And, as noted in an online report on Think Progress, such a decision also would affect children covered by the Children’s Health Insurance Program, or CHIP. Many of those children live in states without exchanges, and the most recent CHIP expansion by Congress tied the program to health insurance exchanges. So that’s a potential 13 million people — including 5 million kids — in all without insurance. All because of what was basically an unintended typo?

You’d almost think that red states would rather have their citizens suffer than do anything to help them and admit that Obamacare is working. Oh, wait …

 

 

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