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Medicaid expansion could boost economy

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PUBLISHED: Sunday, June 21, 2015 at 12:02 am

 

ALBUQUERQUE, N.M. — It should not have come as a surprise, but it did.

Legislative Finance Committee Director David Abbey, who probably knows more about state finances than anyone else alive, said last week that more than 216,000 people have joined the state’s Medicaid rolls under the expansion of Medicaid (authorized and funded by the Affordable Care Act) to able-bodied working-age adults. That puts total enrollment in New Mexico at almost 800,000 people.

By 2020, he said, the LFC expects enrollment to reach 895,000, of whom 257,000 will have been added as a result of the expansion of Medicaid.

Those are much bigger numbers than experts were expecting a year or two ago.

Last July, the LFC was predicting 163,000 people would get Medicaid expansion coverage by now, 53,000 fewer than are covered today. When Gov. Susana Martinez decided in 2013 to accept federal money to pay for expansion, the state Human Services Department, which runs the Medicaid program, was predicting 170,000 people would have expansion coverage in 2020. A University of New Mexico Bureau of Business and Economic Research analysis in 2012 expected enrollment of 150,000 people in 2020.

Before the expansion, Medicaid was available primarily to low-income children, pregnant women and retirement-age and disabled adults. There were about 560,000 of these Medicaid recipients in 2013. There are about 584,000 such recipients today. The federal government pays about 70 percent of the cost of their care.

Under expansion, any working-age adult making no more than 138 percent of the federal poverty level can receive Medicaid. That’s a little more than $16,000 a year for a single person and about $33,000 for a family of four. Uncle Sam is picking up all of the extra cost this year and next, but the federal share starts declining in 2017. The state will have to pay 10 percent of the cost in 2020. HSD estimates that could amount to $268 million.

We should probably have expected higher enrollment, given that New Mexico remains one of the poorest states in the nation. The Census Bureau puts our poverty rate at 20.4 percent. The national rate is 15.4 percent. A program designed to help poor people will find more takers in a poor state.

The increase in enrollment was helped along by the state health insurance exchange, which beat the bushes all over New Mexico to get people to buy commercial insurance through the exchange. All that bush-beating flushed out many people who were newly eligible for Medicaid, so the exchange referred them to Human Services.

Total state spending on Medicaid by 2020, both conventional enrollment and expansion enrollment, could reach $1.1 billion. Abbey warned, “Other parts of the budget are going to have to shrink. If the Medicaid share is growing faster, something else has to grow more slowly.”

Maybe not, said Jim Hinton, CEO of Presbyterian Healthcare Services. “It’s a math question,” he said in an interview. “If the state economy grows at a robust rate, it wouldn’t be such a zero-sum game. Spending in one program wouldn’t come at the expense of another.”

A healthier population, along with an infusion of federal dollars, could help the state’s economy in a number of ways.

For one thing, New Mexicans now eligible for Medicaid have always received some sort of medical care. The cost has always been absorbed by taxpayers and by higher insurance premiums. Families USA, an advocacy group that supports the Affordable Care Act, estimated a family health insurance premium in 2008 in New Mexico included $1,000 a year to pay for the care of their uninsured neighbors.

The University of New Mexico health system spent $241.6 million in 2013 providing uncompensated care. National estimates say uncompensated care costs will decline 30 percent when the ACA takes full effect.

UNM’s Bureau of Business and Economic Research forecasts that the new federal spending that would accompany Medicaid expansion would produce 8,400 new jobs and improve our economy by $8.6 billion by 2020.

A healthier population produces economic benefits of its own. Healthy workers are more productive and have higher incomes than unhealthy workers. Healthy citizens are less likely to need taxpayer-provided social services.

These benefits depend on New Mexico having a society and an economy that can take advantage of this healthier population, Hinton said. “This doesn’t stand alone.”

UpFront is a daily front-page news and opinion column. Comment directly to Winthrop Quigley at 823-3896 or wquigley@abqjournal.com. Go to ABQjournal.com/letters/new to submit a letter to the editor.

Read more: http://www.abqjournal.com/601831/news/medicaid-growth-could-aid-economy.html

Categories: Medicaid Watch