Gov. Bill Haslam is considering whether to recommend expanding Tennessee’s Medicaid program under provisions of the federal Affordable Care Act, commonly known by the law’s critics as Obamacare.
A careful look at the negative impact of refusing to expand the state’s health insurance program for the poor and low-income, and the negative impact that such a decision could have on the state’s hospitals, should convince Haslam to ask the General Assembly to fund the expansion.
Keep in mind, also, that expanding Medicaid would mean some 430,000 of the state’s poorest residents, who currently don’t qualify for the program, would become eligible for it.
Morally, the expansion is the right thing to do.
Legislative opponents of the expansion say the state cannot afford it, and some do not trust the federal government to maintain its funding commitments for the expansion.
The question Haslam and legislative leaders have to weigh, though, is how the state can afford not to expand the program.
Under the ACA, the federal government will pay the full cost of enrolling newly eligible people from 2014 to 2016, after which the federal share will gradually shrink until it reaches 90 percent of the cost starting in 2022.
But here are some other points to consider, according to the Tennessee Hospital Association:
While the expansion is expected to cost Tennessee an additional $199 million over the first 5½ years, that will be offset by estimated federal funding to Tennessee of $6.4 billion for the first 5½ years of the expansion.
That means for every $1 the state spends on the expansion, the federal government will invest $32.
Not expanding Medicaid could result in a substantial economic development hit, costing the state more than $13 million and some 90,000 jobs.
Last year, Tennessee hospitals provided $1 billion in bad debt and charity care and already had $600 million in unreimbursed Medicare costs.
Who eventually pays for the uncompensated care? Taxpayers and insured health care consumers.
These realities are not unique to Tennessee. Conservative Republican governors in states such as Florida, Michigan and Arizona have realized that it makes fiscal sense to expand their Medicaid programs.
That should give Haslam some political cover to make the right decision for Tennessee.
-The Commercial Appeal, Memphis