Medicaid’s impact may drive debate on expansion

By Bobby Harrison/NEMS Daily Journal Jackson Bureau

JACKSON – Federal and state Medicaid spending in Mississippi generated $2.365 billion in salaries for fiscal year 2012, according to a study done by the Policy and Research division of the Institutions of Higher Learning.
Mississippi appropriated $819.3 million to Medicaid, drawing down $2.4 billion in federal funds for a total appropriation of $3.2 billion.
That produced direct labor income of $1.75 billion to doctors, nurses and other medical providers and $613.2 million in “secondary labor income” to health care industry suppliers, according to the study by Bob Neal, a senior IHL economist.
The result, the study concludes, was a $156.6 million addition to the state general fund. The study does not take into account the impact on local governments, such as the property taxes generated by those who earn a living as a result of the federal-state Medicaid program.
“Medicaid is the greatest economic development engine in the state and the greatest health care program, period,” said Rep. Steve Holland, D-Plantersville, generally viewed as one of the Legislature’s more knowledgeable members on Medicaid.
Holland said he wants Neal to do a followup study on Medicaid’s impact on the state’s economy as Mississippi determines whether to participate in the Medicaid expansion that is part of President Barack Obama’s Affordable Care Act, designed to provide health care coverage to at least 30 million more Americans.
An option to expand
In Mississippi, Medicaid currently provides health care services primarily to poor pregnant women, poor children, the disabled and to a certain segment of the elderly population. Currently, there are about 615,000 people on the program.
In the coming years, state leaders will have an opportunity to expand the Medicaid program as a result of the Affordable Care Act, which the Supreme Court upheld last week despite a constitutional challenge from 26 states.
Under the law, about 14 million adults earning less than 133 percent of the federal poverty level, or $14,400 per year, would receive coverage through a Medicaid expansion.
The expansion is supposed to begin in 2014. For the first three years, the federal government will pay all of the costs of the expansion. From 2020 on, it will pay 90 percent.
In what was otherwise a ruling greatly applauded by supporters of the health care law, the high court ruled that the federal government could not force states to participate in the Medicaid expansion because of the financial burden it would place on them.
Republican Gov. Phil Bryant, a staunch opponent of the health care law, said he doubts Mississippi will be able to participate in the expanded Medicaid program.
“Although I am continuing to review the ruling by the Supreme Court, I would resist any expansion of Medicaid that could result in significant tax increases or dramatic cuts to education, public safety and job creation,” Bryant said in a prepared statement hours after the Supreme Court announced its ruling.
Ed Sivak, director of the Economic Policy Center, said “Choosing not to expand Medicaid would be grossly inequitable. While people earning wages above the poverty line would receive tax credits to purchase health insurance, low-wage working adults not earning enough for tax credits would be left out of the program and be at risk of going uninsured.”
And a statement from the state Hospital Association said that not expanding Medicaid would put a burden on Mississippi hospitals.
Shawn Rossi, vice president of marketing for the association, said the group understands the financial constraints state leaders face in dealing with a possible Medicaid expansion. But Rossi released a statement that said “failure to expand Medicaid eligibility will leave just under 200,000 Mississippians with no health care coverage at all. These Mississippians will be left ‘in the gap’ – not eligible for Medicaid and not eligible to purchase health insurance … The result could be devastating… The result could very well mean the closure of many of our community hospitals.”
Currently, Mississippi hospitals receive about $210 million through federal programs to cover about 40 percent of the uncompensated care they provide annually. But the program providing hospitals aid with uncompensated care is being phrased out under the presumption that going forward most Americans will have health care coverage.
Rep. George Flaggs, D-Vicksburg, said he is asking Speaker Philip Gunn and Lt. Gov. Tate Reeves to form a special legislative committee to look at issues surrounding the Medicaid expansion.
“This gives a poor state like Mississippi a rare opportunity to expand access to health care,” he said. “We should at least study it.”
According to Gallup, Mississippi has the second highest percentage of its population without health insurance at 23.5. It follows only Texas where 27.6 percent of the population is uninsured. Florida is third with 22.9 percent of its population without coverage. Arkansas and Louisiana also are in the bottom 10.
bobby.harrison@journalinc.com