The cost of not expanding Medicaid? How about $1,500 per INSURED person?

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Patrick Davis, ProgressNowNM

With the ACA constitutionality thing settled, the only X-factor left for states is the expansion of Medicaid to cover those who are otherwise uninsured and making up to 133% of the poverty level.

Texas recently announced that it would not do so, leaving some 25% of its population without health insurance options.  Other Republican governors, including New Mexico’s Susana Martinez have expressed reservations about using Medicaid to cover our poor and uninsured – as many as 200,000 in New Mexico who are otherwise not insurable and in the “poverty gap.”

In this morning’s Albuquerque Journal [subscription required], Winthrop Quigley examines the impact for hospitals, providers and taxpayers who will still have to foot the bill if those poor and ill New Mexicans continue to delay early care and use emergency rooms for primary care.

He rightly notes,

“New Mexico’s hospitals have a big stake in the decision. Hospitals have received payments from the federal government to compensate them for treating indigent patients. Those payments ($20.4 million in New Mexico last year) disappear under the ACA because the act assumes everyone is covered and hospitals no longer see indigent patients. If Medicaid isn’t expanded, hospitals lose both the payments and coverage for indigent patients.” 

And guess who foots the bill?  Insurance premium payers.  

Again, we go back to Quigley:

“Uninsured people put off getting treatment because they can’t afford it, so small tumors grow into big tumors and treatable asthma becomes chronic lung disease. When these people finally do seek care, their treatment costs far more than it would have had they received care earlier. Because they still don’t have money when they do seek care, the portion of the care they can’t afford is passed on to taxpayers and in the form of higher premiums to those who buy insurance.

Hospitals and doctors can’t (nor should they) turn away someone in need of care, but without federal payments to compensate for that care, and without Medicaid to serve as an insurance policy for those patients, the costs for indigent care will be passed on to regular health insurance premium payers.

Don’t believe us?  Well, the State of Texas recently did it’s own study and found that in that state (where approximately 26% of it’s population is uninsured – much like NM’s estimated 25%), individual or family premium costs would rise by $1,500 per year to cover indigent costs if Medicaid were not expanded.

$1,500 per year, per family.

In the alternative, for the first few years, 100% of the cost of expanding Medicaid to cover uninsured poor in the “poverty gap” will be paid by the federal government.  That’s because the cost to get those patients seen, evaluated and on a sustainable treatment program is likely higher if those patients have avoided care for years.  By the time states start paying a portion of the costs to pay for those expanded patients (and states pay just 10% of that cost by 2020, max), treating those patients will be cheaper because they will be using preventive care instead of emergency care.

Admittedly, with the ACA thing settled, New Mexico needs a study of it’s own, but our neighbor to the East has already opened the door to showing us what this really means for the insured and their premium costs.

Expanding Medicaid to cover the “poverty gap” seems like a no brainer for health care advocates, but too often politics can get in the way.  In this case, even those with a political point in opposition have a reason even they can support: $1,500 they will have to pay if Medicaid doesn’t.