Medicaid Expansion will save (not cost) Wyoming tens-of-millions

A recent headline told readers, “Optional Medicaid expansion could cost the state $58.5M.” Governor Mead ignored significant conclusions of the report telling a reporter he is “concerned about the costs for the non-optional expansion of Medicaid programs that are mandated in the health-care law.”

The governor’s claim that the fiscal impact of insuring approximately 30,000 Wyoming citizens under the option to expand Medicaid would cost the state millions was not supported by the report. If you read the entire Wyoming Department of Health document, which you can read at http://www.health.wyo.gov, you’ll find the program will save Wyoming taxpayers hundreds of millions of dollars.  

The study estimates a projected cost range of $53 million to $311 million over six years, 2014-2020. (Page 21) Unfortunately for the naysayers, the report didn’t stop there. The headline should have read “Obamacare Will Save Wyoming Millions Through Medicaid Expansion.”

Those facts are substantiated on page 18 of the report where savings are curiously not used to calculate the cost reflected in the governor’s comments. There the report says, “We expect some of the newly eligible members who will enroll in Wyoming Medicaid starting in 2014 will be people who would have otherwise been eligible for other state-funded programs. This would result in reduced enrollment and costs for those programs, offsetting some of the cost of Medicaid expansion to the state.”

“Offsetting some of the costs” is their way of saying that if the Governor implements Medicaid expansion, there will be huge savings, as much as 700 million dollars over the six-year period. The potential savings far exceed any new costs because programs previously created to provide health care to the uninsured will become largely unnecessary and most of those costs recouped.

The report identified the following programs among those that could be drastically reduced or eliminated if Medicaid is expanded. The numbers in parentheses are the two-year budget reductions that would result: Prescription Drug Assistance Program (4 million dollars), some costly care at the Wyoming State Hospital (76 Million), Children’s Health Insurance Program (11 Million), mental health and substance abuse treatment (114 million), and other Health Department programs “some of which would likely see a reduction in covered population with the expansion of Wyoming Medicaid. 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).” An additional 9 million dollars savings would result each biennium from costs currently incurred for uncompensated medical care provided the uninsured. (Report pages 18-20)

Note the additional costs on which the governor focused are incurred over a six-year period, amounting to a little less than 20 million dollars per biennium. Compare that to the costs savings of nearly 240 million per biennium realized when the legislature ends state funding for healthcare costs that will then be paid by Medicaid.

The report contains an important disclaimer that should be noted by the media, the governor, the legislature and the public. “From a state budgetary perspective, the cost estimates for Medicaid expansion…should be read in light of the possible cost offsets from these other programs discussed in the previous section.” (Report page 27)

The “cost offsets” can be called “possible” only if you assume the legislature will fund unnecessary programs. They won’t. In addition to the actual savings, thousands of low income working families would then have health insurance. They would receive preventive care, earlier diagnosis of serious disease and enjoy healthier lives while the state builds a more effective health infrastructure with the new dollars.

Taking the opportunity to insure the uninsured is the right moral choice. Now the governor knows it is also the right fiscal choice. Perhaps making the right choice will have to await the outcome of the November election. After that the nation can put the partisanship generated by Obamacare behind us and get on with the real and important work of providing health care.