Sunday, September 15, 2019

$778 Million? What $778 Million?

Medicaid expansion advocates are now trotting out the former Arkansas Surgeon General.  Arkansas rolled out an experimental Medicaid expansion program that used private insurance instead of Medicaid.  Dr. Joe Thompson recently penned a column touting the program's "success" in the Clarion-Ledger:


I was Arkansas’ surgeon general in 2013 when the state, then led by a Democratic governor and a Republican-controlled legislature, created an innovative approach using Medicaid expansion funds to purchase private health plans for people earning up to 138% of the federal poverty level. Known informally as the “private option” and now officially as Arkansas Works, the program provides coverage to about 250,000 Arkansans. Arkansas is now a firmly red state, yet it has reauthorized the program every year. Why? The numbers tell the story.

A 2015 Gallup report showed that since its Medicaid expansion program took effect in January 2014, Arkansas’ uninsured rate had been cut in half, dropping from 22.5% to 11.4% ― the biggest reduction in the nation. Arkansas went from being ranked 49th for its uninsured rate ― only Texas’ was worse ― to 20th. As of 2017, Arkansas’ uninsured rate was again 11.4%. Mississippi’s was 18.3%, and Texas’, still the worst, was 23.4%.

The lower uninsured rate led to a 55% reduction in uncompensated-care losses at Arkansas hospitals. This has been especially important for rural hospitals, which treat many low-income patients. Since January 2010, only one rural Arkansas hospital has closed for financial reasons. In the five neighboring states that have not expanded Medicaid, 47 rural hospitals have closed, including five in Mississippi, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill.

Expanding Medicaid also has helped stabilize Arkansas’ health insurance market, improve competition and control premiums. Since 2014, no fewer than three and up to five insurers have offered plans through the Health Insurance Marketplace in each of the state’s counties. Many Southern states have only one participating insurer in many of their counties — an exception being Louisiana, which expanded Medicaid in 2016. The competition encourages low rates: In 2014, 38 states had marketplace premiums lower than Arkansas’; in 2018, only six states had lower premiums.

Medicaid expansion has brought billions of new federal dollars into Arkansas’ economy: $1.7 billion between January 2014 and June 2015 alone, according to the Kaiser Family Foundation. Arkansas also is saving money because some individuals previously covered under traditional Medicaid, which in Arkansas is 30% state and 70% federally funded, are now covered under Medicaid expansion with enhanced federal funding. A legislative task force consultant estimated in 2016 that Medicaid expansion would save Arkansas $757 million between 2017 and 2021.

Arkansas modified its program last year to include a much-debated work and community engagement requirement that currently is blocked by a federal judge’s order. However that issue is ultimately resolved, it is clear from the examples of Arkansas and other states that Medicaid expansion is a triple win: a benefit to the working poor, hospitals, and state economies.

"The numbers tell the story." Indeed they do, Dr. Thompson, and there is one number you conveniently left out of your column: $778 million. Does that number ring a bell? It should because the GAO said your program cost that much more than it would have if Arkansas had used traditional Medicaid instead of your experiment.   The GAO stated in a 2014 report:

In approving the demonstration, HHS did not ensure budget neutrality. Specifically, HHS approved a spending limit for the demonstration that was based, in part, on hypothetical costs—significantly higher payment amounts the state assumed it would have to make to providers if it expanded coverage under the traditional Medicaid program—without requesting any data to support the state’s assumptions. We estimated that, by including these costs, the 3-year, nearly $4.0 billion spending limit that HHS approved for the state’s demonstration was approximately $778 million more than what the spending limit would have been if it was based on the state’s actual payment rates for services provided to adult beneficiaries under the traditional Medicaid program....

Indeed, Arkansas' medicaid enrollment grew so much that the state instituted a work requirement that affected a quarter of the enrollees.   The work requirement is now tied up in a court fight. 

8 comments:

Anonymous said...

"Federal dollars" = bribing the sheeple with their own money. Oh wait, maybe it grows on trees. Yea, that's it.

Anonymous said...

Go read the stuff put out by the Pelican Institute. Louisiana's expansion numbers are cooked.

Anonymous said...

Perhaps if MS wasn't the fattest state in the nation, the need for hospital care wouldn't be what it apparently is.

Anonymous said...

Uh last time I checked both Arkansas and Missippi are net takers it's not their money.

Anonymous said...

This report was 5 years ago and part of an ongoing clash between HHS and GAO about what is and isn't " budget neutrality".

Not in dispute is that a significant number of people are insured and not using ER and it aids rural hospitals so accessibility improved.

Neither HHS or GAO are measuring the cost benefits of a healthier and thus more productive population so maybe including those stats would be good. Arkansas' has already increased another 4% just this year.

Anonymous said...

'Budget Neutrality' = emerging (old) mythical expression.

How often do we hear a Madison County Supervisor or Department Head mention, "The feds are either paying for it or reimbursing the county for the cost" so there is no budget impact and it's literally free". Believe it at your own risk.

Anonymous said...

Somehow, when Doctors complete medical school, it makes them believe they are masters of economics as well. A few years later, their wives prove otherwise to them. But, some of them seem to still ignore that fact.

Anonymous said...

@8:54 Well said. Mississippi's actual life support is 44% federal dollars.....and no one thinks anything could happen to affect that. Millions are unprepared. Dark days on the horizon.

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