Study: Not expanding Medicaid could still lead to increased cost - WAFF-TV: News, Weather and Sports for Huntsville, AL

Study: Not expanding Medicaid could still lead to increased costs


According to a new study from the Kaiser Foundation's Commission on Medicaid and the Uninsured, states that don't expand Medicaid could see higher costs on healthcare than those that do expand Medicaid.

The survey looked at all 50 states' budget obligations for Medicaid for the 2013 and 2014 fiscal years as well as other data from the federal government.

Currently 25 states including the District of Columbia have embraced Medicaid expansion under the Patient Protection Affordable Care Act, also known as Obamacare, while 26 states have refused to expand the healthcare program for the poor, disabled, and the elderly.

All of the states that have turned down the extra federal matching dollars either have Republican governors or Republican controlled state legislatures.

The study found that when it comes to Medicaid spending, states that don't expand their Medicaid programs could see higher growth in their state shares of spending on Medicaid while those that do expand Medicaid will see higher spending as a result of higher rolls, but it won't be as a result of higher healthcare-related costs.

The authors wrote "While total spending growth for the 25 states moving forward with the Medicaid expansion was higher compared to those not moving forward (13.0 percent compared to 6.8 percent), these states had lower rates of growth for state funds (4.4 percent compared to 6.1 percent)."

In addition, the authors found that states that are expanding will in fact see savings for state budgets as a direct result of expanding Medicaid.

"Most of the 25 states moving forward with the expansion indicated that the state would achieve net state savings from the expansion. State budget savings were most frequently attributed to reductions in spending for state funded services such as mental health, corrections health, uncompensated care or care from other state programs for the uninsured (including limited benefit programs) due to increased Medicaid coverage."

For Alabama, the findings suggest that Alabama's General Fund Budget could shoulder an even bigger load of Medicaid expenditures. Alabama's Medicaid Agency encompasses of roughly a third of the state's General Fund which provides appropriations for all non-education entities.

For the 2014 fiscal year, Alabama lawmakers passed and the governor approved $615 million for Medicaid with an additional $50 million in conditional appropriations in the event revenues came in higher than expected.

If the study is correct, then Alabama could face an additional $37 million in Medicaid related costs just by virtue of the increased costs for health services.

Overall, Alabama's Medicaid program is a $5.3 billion program when all funding sources are combined.

Under the Medicaid expansion section of the federal healthcare law, Alabama could receive an additional $1.2 billion for Medicaid starting in 2014 to cover the estimated 300,000 individuals who would be eligible, according to the Kaiser Foundation.

Alabama's Gov. Robert Bentley has refused to expand Medicaid. He has said that he refuses to expand what he calls a "broken system."

The governor instead says that he wants to see Medicaid reforms fall into place. The legislature approved a new healthcare delivery system for more than 900,000 Medicaid patients in the state that divides the state into five Regional Care Organizations tasked with coordinating care with the patients that live in each region.

Gov. Bentley has never completely ruled out Medicaid expansion but says the key for Alabama's Medicaid program is making sure the reforms work.

The Kaiser study on Medicaid spending comes around the same time as a different Medicaid study was released that was commissioned by the Alabama Hospital Association. The study was completed by the University of Alabama and it focused on the economic impact of the expansion.

That study concluded that the injection of funds from Washington would create about 30,000 new jobs over six years in addition to an extra $2 billion added to the state's GDP.

The deadline for Alabama officials to decide on Medicaid expansion is December 31 or else it will miss out on the first quarterly payment of $375 million from the federal government.

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