Budget leaders eye cost of Medicaid expansion

By Bobby Harrison/NEMS Daily Journal Jackson Bureau

JACKSON – Legislative leaders on Thursday debated the cost of opting into the Medicaid expansion that is part of President Barack Obama’s new health care law.
David Dzielak, executive director of the state Division of Medicaid, told the Legislative Budget Committee it would cost the state $1.6 billion over seven years to expand Medicaid as called for in the Affordable Care Act.
Dzielak cited a study done by Millman, a nationally respected actuarial company, at the behest of former Gov. Haley Barbour.
Various health care advocates contend the Millman study overestimated the cost and have cited other studies, including one in Arkansas that predicted a net gain in state revenue collections.
States have the option of participating in the portion of the new law that expands Medicaid to cover people earning 133 percent of the federal poverty level or about $14,000 annually. Gov. Phil Bryant, who appointed Dzielak, opposes the expansion because he says the state can’t afford it.
Both House Speaker Philip Gunn, R-Clinton, and Lt. Gov. Tate Reeves also said they oppose the new law and the Medicaid expansion.
But both said they would continue to look at the expansion to determine its benefits to Mississippi.
“Personally, I am opposed to it, but it is the law,” Gunn said. “…The question is whether we can afford this.”
Dzielak said Millman is performing an updated study and state economists are taking a comprehensive look at how the expansion would impact health care providers and the entire state economy.
Rep. George Flaggs said federal officials told the National Conference of State Legislatures recently that states could opt in or out of the Medicaid expansion at any time.
Flaggs said that means a state could opt in when the expansion begins in 2014 and the federal government pays the entire cost of the new enrollees and opt out after three years when the federal share drops to 95 percent.
In 2020, the federal share goes down to 90 percent.
But Dzielak said the state would have to pay other costs from the beginning, such as signing up new enrollees. He estimated those costs at more than $50 million.
In Mississippi, Medicaid currently provides health care for the disabled, poor pregnant women and children, and certain segments of the elderly population.
For the upcoming fiscal year, Dzielak told legislative leaders $980.5 million in state funds would be needed to operate the program – up about $159 million from the current appropriation.
Plus, Dzielak requested a deficit appropriation of $72.2 million. Under the current program, the federal government provides about 73 cents of each Medicaid dollar spent in Mississippi.
Medicaid currently covers 711,500 Mississippians. The expansion could add as many as 400,000 more.
bobby.harrison@journalinc.com