The slow, or fast, train to 2014
By Tom Baxter
Stories about the Republican governors’ struggle with accepting the Medicaid expansion often say, as an Associated Press story did this week, that under the Affordable Care Act, “Washington pays the full cost of the expansion for the first three years, gradually phasing down to 90 percent.” This is true, but there is a little more to it, and in political terms that little is large.
To expand the explanation somewhat, from Jan. 1, 2014, to Dec. 31, 2016, the feds will pay the participating states 100 percent of their Medicaid costs. The scale-down begins in 2017 and reaches 90 percent in 2020. (Under the current Medicaid system, the federal share in Georgia is about 66 percent.)
What results from this is somewhat akin to Einstein’s Theory of Relativity. To some GOP governors who have been vocally opposed to Obamacare, the train they’re on appears to be moving slowly enough to get through one more qualifying, one more election, maybe even having their portrait hung in the capitol before they’re compelled to concede. To others, the very same train seems to be moving much faster, as they ponder the costs of delay, both to their state budgets and their re-election prospects.
The train metaphor isn’t accidental. You may think Obamacare and its cornerstone program is as bad an idea as the war in Iraq, but as surely as there was the one, there is going to be the other. Florida Gov. Rick Scott’s announcement last week that he’ll accept the expansion after all was a very loud whistlestop for an engine gathering steam, though there is still much political drama ahead, as evidenced by Gov. Nathan Deal’s insistence that he’s standing firm in refusing the money.
Last week, advocates for expansion released a study by Georgia State’s Bill Custer estimating that it would add 70,000 new jobs to the state’s economy, including 26,000 in the Atlanta region. It’s harder to put a precise value on the cost of delay, although advocates for expansion say it will be high. Tim Sweeney, director of health policy at the Georgia Budget and Policy Institute and a recent guest columnist on this site, said Monday the monthly cost of delay could range anywhere from $240 million to $300 million, with a cost to the state exceeding $3 billion in passed-up federal money by the end of 2014.
But this is only an estimate, and by Sweeney’s admission a wide one, because what will really happen on Jan. 1 of next year is that the feds will pay the 100-percent tab as new enrollees come into the system and start to generate medical bills. No one can say how fast or slow that will happen, although there’s a lot of pent-up demand.
If we think of the costs as U.S. taxpayers, it gets even more complicated. Suppose Georgia waits until, oh let’s just say, November 2014 to accept the money, and someone with hypertension has to wait to see a doctor until then. If they get better in the coming year, the taxpayers saved nearly a year’s worth of blood pressure pills. But if in the interim they have a stroke and the taxpayers inherit a nursing home patient, the costs will be astronomically higher.
On the other hand, maybe that’s not so complicated. Georgia’s chronically underfunded Medicaid system is at a tipping point, with or without the expansion and despite the Bandaid effect of the bed tax extension. The strongest argument for the inevitability of the expansion may be the state’s inability to come up with a better idea. The legislature has passed some feel-good legislation, like the 2012 law which allows out-of-state insurers to sell stripped-down policies without some of the mandatory coverage that was said to be driving up overall costs. In two years, not one company has taken the state up on that offer.
Going it alone after 2014 is going to require a lot more invention than that.