Saturday, September 29, 2012

Governor Mead isn't prepared to talk about Medicaid savings. I am.

When Governor Mead spoke to reporters earlier this month about a Department of Health (WDH) study on the expansion of Medicaid, he talked only of the costs. Mead said it could cost between a wide range of 53 to 310 million dollars over a six-year period. Mead had “grave concerns” about the costs.

Likewise, I had “grave concerns” when I read the Governor’s comments because, based on my four years as a WDH deputy director, I knew there were huge cost savings to be realized through Medicaid expansion. Talking only of “costs” without acknowledging savings seemed like trying to tell the story of Jonah without any mention of a whale.

So, I read the report. It does talk about savings. Two weeks ago in this column, I did as well.

Mead’s office was displeased with my suggestion that as much 700 million dollars would be saved over the same six-year period. Perhaps I should have been less exacting and offered as wild a ranging guess as did the authors of the report. I could have said savings would definitely range between $1 and 700 million. Mead’s staff did acknowledge there would be savings but the administration hasn’t determined how much. That was rather surprising given that the Governor is expressing “grave concerns” about the costs. But since his analysis is not completed, I offer my own based on the Medicaid cost study and my experience with many of these programs.

What we were doing before Obamacare wasn’t free. The legislature appropriates millions to care for those without health insurance. The most expensive example is mental health and addiction treatment. Most people needing treatment were previously uninsured or had inadequate coverage. Consequently, the 2013-2014 budget for these treatment programs is 114 million dollars. With Obamacare, coverage for treatment is mandated. With Medicaid expansion this entire amount, in my opinion, could be saved. Potential savings in this one program more than offsets even the highest and wildest six-year cost projection.

The study concedes all persons currently benefitting from Wyoming’s Prescription Drug Assistance Program would be covered under Medicaid, saving 12 million dollars.

The report identifies several other costly programs to significantly reduce or eliminate if the Governor chooses to expand Medicaid. The State Hospital’s “proposed general fund appropriation for the 2013-14 biennium” is 76 million dollars. The report acknowledges, “Medicaid expansion under the ACA could reduce the general fund outlay for the Wyoming State Hospital; some persons currently served would become eligible for Wyoming Medicaid, which will receive considerable federal funding.” Additional savings will be garnered in the Children’s Health Insurance Program, the Wyoming Life Resource Center, breast and cervical cancer screening, the Wyoming Colorectal Cancer Screening Program, and the Office of Rural Health.
The report goes on to discuss savings likely to come from several other programs. “These include (dollar amounts are budgeted general fund appropriations for 2013-14) Public Health Nursing ($12 million), Immunization Program ($9 million), Maternal and Family Health ($4), and Oral Health Programs ($1 million).” Medicaid expansion would cover some of the services currently provided under these programs.
Finally, there are uncompensated costs for treating the uninsured, costs shifted to the insured, raising their premiums. Taxpayers pick up the tab when costs are shifted to state employee health insurance. The report finds, “The expansion of Wyoming Medicaid would lead to a reduction in the number of uninsured and likewise reduce uncompensated care, which could in turn reduce Wyoming’s expenditures on employee health insurance premiums.”
True, my estimate of near 700 million dollars savings may be off. First, the Governor has an interest in minimizing the savings in order to support his narrative that Medicaid expansion is too costly. Second, each of these programs has a constituency. Some even have lobbyists. There are still a lot of politics to be played. Along the way, neither the Governor nor legislators should be touting the costs without conceding the savings when it’s clear the savings swallow up any projected costs just as that whale swallowed up Jonah.

No comments:

Post a Comment