A Drive By About Obamacare Medicaid Expansion

If someone offered to buy you a car and asked you to pay 10% of the cost, what is the first thing you would do? began Speaker Greg Hughes Wednesday morning at a Utah Valley Chamber of Commerce event on Medicaid Expansion.

The answer is: Figure out the total price of the car. If the car is a Bentley, you might have second thoughts since your 10% is still a lot of money. If the car is a Chevy, then the 10% is easier to say ‘yes’ to.

Stan Lockhart
By Stan Lockhart

That analogy summed up the concerns of panelists today about Medicaid Expansion. Legislators must balance the budget every year. It is impossible to responsibly balance a budget when you don’t know the cost of a program. The cost of Medicaid Expansion is a moving target. Some worry that the Federal government won’t honor the 90/10 match rates they have prescribed through 2020. Others worry about costs for States even if with the Federal government keeps their promise. Data is emerging from other States that their best estimates of State portion of costs were woefully inadequate. In some cases, they are experiencing double the costs.

Obamacare Medicaid Expansion doesn’t allow capping of costs. If you end up paying tens of millions of dollars more than what was expected, then State policy makers have to make painful choices and cut existing programs not just in healthcare but in other government services. A few years ago, former Higher Education Commissioner Bill Sederburg opined that one of the greatest threats to higher education funding was Medicaid Expansion. From the data gathered so far in other States, it appears he made a good point.

One of the challenges is figuring out who to cover. The longstanding Utah tradition of personal responsibility and self-reliance conflict with the fact that many in the coverage gap are able-bodied men and women. Who is most vulnerable?

Even without the current Medicaid Expansion proposal, the Medicaid portion of Utah’s budget continues to rise putting greater constraints on every other government program. Other healthcare needs, public and higher education, corrections, public safety, economic development, transportation, and many more areas of the budget are threatened by Medicaid’s growth. Now add to the current dynamic the additional Obamacare Medicaid Expansion. Yikes. No wonder Utah is taking a deliberate approach to the problem.

A very positive sign is that Governor Gary Herbert and legislative leaders are committed to finding a solution to help those who cannot provide for themselves. They are committed to a safety net. That will likely mean something less than what the Governor has been touting, but more than Legislative leaders have been advocating. A lot depends on how much the federal government wants to work with Utah and provide waivers. A chance to baseline off of costs in the 29 states that have now accepted some form of Medicaid Expansion is a wise and intentional approach to solving this problem.

As Hughes said, this is a once in a generation decision and it needs to be made with the long-term impacts in mind.

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