Millions Eligible for Health Coverage through Medicaid Expansion

Mar 07, 2013

On February 20, Florida Governor Rick Scott (R), a vocal critic of healthcare reform, announced his state will expand Medicaid coverage, a provision of "Obamacare" affirmed last summer by the U.S. Supreme Court. Days later, Governor Chris Christie(R) of New Jersey became the most recent Governor to announce his state's participation, which will expand coverage to 300,000 uninsured New Jersey residents. Gubernatorial support of the expansion does not guarantee the Medicaid expansion will happen in a state; state legislatures have a say as well. Nonetheless, as of today, 24 states' executives have announced plans to expand Medicaid. Though at times the issue has been politically charged, Republicans and Democrats are recognizing that the expansion is a good deal for states and an excellent opportunity to improve health coverage for their residents.

Where the States Stand
 Via: The Advisory Board Company

The decision to expand health coverage is being weighed by Governors and state legislatures across the country. In the majority of cases, it comes down to three questions:

  • Will the expansion improve health coverage and health outcomes for the uninsured?
  • Will states have the flexibility to design a program that fits their individual state context?
  • Will states and the federal government be able to afford the reform?

On all three questions, CLASP argues the answer is yes.

On increasing health coverage: Through Medicaid expansion, millions of uninsured low-income families, retirees and individuals with disabilities will obtain affordable healthcare. We know that connecting additional residents with Medicaid saves lives. The New England Journal of Medicine found that increased rates of health insurance coverage improve health outcomes, decrease rates of delayed care and reduce mortality among older, non-white adults.

Through Medicaid expansion:

  • 17 million more low-income adults and children will obtain health care coverage.
  • There will be fewer uninsured children. As parents become insured, their children will, as well, because insured parents are more likely to learn about CHIP and other health coverage options for children and receive coordinated assistance to enroll all members of the family.
  • Approximately 625,000 low-income veterans will be eligible for healthcare coverage. This number represents at least half of all low-income veterans.

As Governor Scott explains, "While the federal government is committed to paying 100 percent of the cost, I cannot in good conscience deny Floridians that needed access to health care...This helps Florida taxpayers by lowering costs and Florida families by improving healthcare services."

On state flexibility: While CLASP believes it is important to monitor the state experiments to assure that individuals are not being denied needed care, it is clear that states will have significant flexibility. State expansion allows state waivers and the adoption of trial and re-evaluation periods. When Governor Scott announced Florida's expansion of Medicaid, he cited the additional flexibility afforded by a federal approved waiver, allowing the state to better coordinate care for its residents.

On program costs: The potential cost of expanding Medicaid is perhaps the main concern of most governors. But, according to the Kaiser Family Foundation report, even taking into account the highest estimates of state Medicaid expansion costs, Medicaid expansion will save states a total of $10 billion over the next decade. The Congressional Budget Office estimates that state Medicaid expansion will reduce the federal deficit because decreasing the number of uninsured will help states save substantial amounts on uncompensated care for the uninsured. States are also estimating savings. For example, Arkansas projects net savings of $630 million from FY 2015 - FY 2021, and Idaho projects a decrease in state and local health care spending for the uninsured by roughly $792 million over the same period.

Medicaid expansion is a good idea, and not only because it will connect millions of low-income families to affordable health care coverage. It is also being implemented in a way that allows for state flexibility and cost savings over time. States that expand Medicaid in 2014 will be eligible to take advantage of 100 percent federal funding to support this expansion during the first three years of implementation. Federal reimbursement will phase down to 90 percent by 2020. CLASP encourages state leaders who are unsure, or do not support expansion of quality health coverage, to do so without delay.

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