The push to liberate Georgia from restrictive federal health-care regulations is making progress.
A Senate committee this past week approved a bill authorizing Gov. Brian Kemp to pursue flexibility for the state – in the form of “waivers” from certain requirements related to Medicaid and the Affordable Care Act, or ACA. If the full Senate and then the House agree, the important work of proposing new, more flexible arrangements tailored to Georgia’s needs could begin this spring.
A misguided notion that has cropped up during this debate is the idea a Medicaid waiver could be “more expensive” than simply expanding the program as allowed by the ACA. It reflects a wrong-headed, but all-too-common, way of thinking about public spending.
When people say a waiver could be more expensive than expansion, they ostensibly are talking only about state tax dollars. To understand why requires us to delve into the weeds just a bit.
The ACA authorized states to offer Medicaid coverage to people earning up to 138 percent of the federal poverty level (this year, that’s $17,236 for an individual or $35,535 for a family of four). To entice states to go along, Congress offered states a sweeter deal than usual: The federal government would pick up no less than 90 percent of the cost of covering these new enrollees, compared with a much lower rate for existing enrollees. In Georgia, that lower rate is about two-thirds of the cost.
The Kemp administration has signaled it will cap the Medicaid program at 100 percent of the poverty level but will still seek the 90 percent match. (Those between 100 and 138 percent will still be eligible for subsidies on the ACA exchange.) No state has gotten the higher match for the smaller enrollment increase, although Utah is currently seeking to do so.
So, critics contend, Georgia is choosing a “more expensive” option by enrolling fewer people at a lower match rate.
But it’s not as if federal tax dollars come from Mars. They come out of your paycheck just like your state taxes. Even if a large portion of federal spending continues to be borrowed, that still represents a future tax liability – with interest on top.
The closer we get to all states expanding Medicaid – which is what the critics want – the more untenable is the argument that non-expansion states are subsidizing other expansion states. That is a false argument anyway: As long as Uncle Sam is running large annual deficits, it’s future taxpayers, not Georgians, who are picking up the tab.
What’s more, the combined federal and state cost of Medicaid expansion is almost certain to be “more expensive” than a waiver because it affords no motivation, and precious little latitude, to cut costs.
The entire point of seeking a waiver is not just to cover more people. It’s to give them better access to care, since Medicaid recipients have a harder time finding a doctor who will see them than privately insured Georgians. That in turn encourages them to be healthier. Some states that expanded Medicaid, most notably Oregon, found new recipients were more likely than the uninsured to visit the emergency room for routine care. That’s not only more expensive, but if they were going to the ER, it’s probably because they had no relationship with a primary care doctor.
Using flexibility from federal rules to customize Georgia’s Medicaid should drive down costs not only through innovation but by making it easier for recipients to get improved health care. Isn’t that what this debate is all about?
• Kyle Wingfield is president and CEO of the Georgia Public Policy Foundation. Contact him through the group’s website at www.georgiapolicy.org.