January 24, 2013

Medicaid Program Expansion

CHA has recently provided some resources with regard to the expansion of medicaid.  In Minnesota, this has been a primary emphasis of our Governor and will be discussed this legislative session with the implementation of the Affordable Care Act (ACA). CHA-Minnesota continues to work with the department and legislators on this topic.

Medicaid Program Expansion

 The Medicaid program has been a vital component of the nation’s safety net since its creation in 1965. Funded jointly by the federal government and states, Medicaid provides health coverage for low-income families and individuals including children, parents, seniors and the disabled. Just prior to enactment of the Affordable Care Act (ACA), Medicaid served nearly 63 million low-income Americans over the course of the year, including 31 million children; 17 million adults (mostly low-income working parents); 6 million seniors; and 10 million persons with disabilities.

The ACA included an expansion of the Medicaid program to everyone under 138 percent of the federal poverty level (FPL). The coverage expansion is a vital part of the law’s effort to provide health coverage to approximately 30 million people. Unfortunately, the June 2012 ruling by the Supreme Court allows states to choose whether or not to expand the Medicaid program without penalty. If a state chooses not to expand the Medicaid program, the ability of the ACA to expand coverage, particularly to vulnerable populations currently living without health coverage, is diminished.

Position of Catholic Health Care

The mission of the Catholic health ministry, in accordance with the Ethical and Religious Directives for Catholic Health Care Services, calls us to be distinguished through “service to and advocacy for those people whose social condition puts them at the margins of our society and makes them particularly vulnerable to discrimination.” We are committed to ensuring that these populations get the access to coverage extended to them under the ACA, as well as to preserving Medicaid from harmful budget cuts and program changes proposed in Washington.

As a Major Employer and Health Care Provider

The Catholic health ministry is an important part of the health care system in Minnesota, employing 19,459 individuals.

Medicaid is an important safety net program in Minnesota, where Catholic hospitals provided inpatient care to 23,920 program beneficiaries in 2010.

Medicaid Expansion and the Uninsured

The Medicaid expansion under the Affordable Care Act is estimated to reduce the number of uninsured adults living below 138 percent of the poverty level by 71 percent in Minnesota.[i] This would be a significant step in reducing the overall number of uninsured in our state, which was 463,075 in 2010.[ii]

Without access to Medicaid under the expansion, many low-income individuals and families will not be able to take advantage of the other coverage provisions available due to their cost. This will continue the situation of the uninsured seeking care in hospital emergency rooms. This uncompensated care is wasteful and costly, and was a major factor behind efforts to reform the health system.

The Costs and Benefits of Medicaid Expansion

The shared costs of covering the population eligible for the Medicaid expansion will be markedly different from current Medicaid rates. The federal government will pay 100 percent of the coverage costs for the first three years (2014-2016), and will then phase down payment through 2020 to no less than 90 percent thereafter.

State concerns about increased state expenditures for currently eligible but not enrolled Medicaid individuals will happen with or without the Medicaid expansion, because of the new individual coverage requirement included in the ACA.

The Congressional Budget Office estimates that the average additional cost to states for the expansion represents only a 2.8 percent increase in what they would have spent on Medicaid from 2014 to 2022, in the absence of health reform.[iii]

In addition, the Medicaid expansion will reduce state and local government costs for uncompensated care and other services they provide to the uninsured, helping to offset the small increase in Medicaid spending. The Urban Institute estimates that the ACA will roughly halve spending on uncompensated care.[iv]

[i] Kaiser Commission on Medicaid and the Uninsured: Medicaid Coverage and Spending in Health Reform, May 2010

[ii] March 2010 Current Population Survey US Census Bureau

[iii] Center on Budget and Policy Priorities: How Health Reform’s Medicaid Expansion Will Impact State Budgets, July 2012

[iv] The Urban Institute: Consider Savings as Well as Costs, July 2011