Free money, right? After all, the feds pay 100% of the costs for the first couple of years, then slowly decrease the amount until they are paying 90% and the states are paying 10%.
It all sounds well and good, but there are a few facts that are often left out of the arguments promoting opting-in to the expansion.
First of all, there is no such thing as free money. Printing presses aside, the federal government does not actually create income – it takes its money from you and me.
The arguments for states taking the expansion always seem to neglect to mention that there are two parts: voluntary expansion that states can opt-in to – or refuse to opt-in to – and MANDATORY expansion under the Accountable Care Act, aka Obamacare.
When the full implementation of Obamacare goes into effect next year, states will find the increased costs staggering – even without the additional expansion under the voluntary portion.
Under Obamacare, Medicaid eligibility will expand to include people making up to 138% of the federal poverty line (now at 100%), it will include young adults up to age 26, asset testing will go away and people who currently eligible but not enrolled will be pushed into the Medicaid system because of coming changes. Those numbers are conservatively estimated to be an additional 56,000 people on Utah’s rolls by 2022 and again, this part is mandatory.. Costs to the Utah state budget are expected to be hundreds of millions of dollars in the next decade and billions of total dollars.
Then, there are tax credits. People who are not eligible for Medicaid can qualify for rolling monthly tax credits if they earn up to 400% of the federal poverty line. 400%. Almost 3/4 of all Utahns could potentially qualify.
Here’s a catch though – in order to be eligible for the tax credits, recipients must apply for and be denied Medicaid coverage. Even if they have private insurance, they must still apply and if they are eligible for Medicaid, they cannot receive the tax credit. To make it even more difficult and burdensome, Medicaid eligibility is determined on a month-by-month basis. Hundreds of new workers will have to be hired, just to process eligibility requests and stay on top of month-by-month income changes for people not only on Medicaid but those receiving the tax credit meant to offset health care costs. Those costs are not counted in the increased costs of Obamacare and expanded Medicaid coverage – and it doesn’t even touch the increased regulatory burden.
Turning to the Children’s Health Insurance Program (CHIP), a whopping 66% of children currently on CHIP will be shifted onto the more expensive Medicaid program, adding tens of thousands to the rolls because of the removal of asset testing under Obamacare.
Here’s the part no one wants to talk about: The Kaiser study “Medicaid and the Uninsured“ does not account for any of the following:
- Administrative costs the state must incur for increased Medicaid enrollment. Under the mandatory expansion, we are looking at an increase in 40 FTE’s (Full-Time Equivalents). At $60,000 each, that’s $2.4 million dollars, ALL coming from the state coffers. Under the voluntary expansion, we can expect to see an additional 88 FTEs, boosting administrative costs to almost $8 million just to administer the program. It also does NOT include infrastructure costs – office space, phones, computers, mailing costs, etc. The federal government does not cover one dime of those costs.
- Decreases in federal funding amounts due to budgetary reductions, “fiscal cliff” allocations / adjustments, sequestration, and perhaps a good dose of reality (we can’t afford it).
- An unwillingness/inability of the federal government to meet its promises. In other words, do we really believe the money will be there in 10 years – a trillion dollars more – when we can’t make ends meet today? That’s called magical thinking.
Make no mistake – there is an appropriate need for a safety net. Let’s examine, for example, targeted Medicaid waivers for families dealing with severely autistic children. Or putting the prison population in the Medicaid pool, since we’re paying for their care one way or another anyway. But honestly – do we need every BYU, UVU and U of U student covered by Medicaid? Medicaid is already squeezing the state budget and impacting areas like higher education and transportation. Voluntarily increasing the pain is simply foolish. The feds are already shooting us in the chest. Must we compound that by shooting ourselves in the head?
One final comment for the Utah legislature and specifically the Governor: Just say no.