Today, Nebraska’s Medicaid Director, Calder Lynch, testified to his state legislature that Medicaid expansion under LB 1032 would cost the state nearly a billion dollars over 10 years, appearing totally unaffordable. What the media failed to point out is how the actuarial analysis the state commissioned was biased through a project scope that was determined by the state and guaranteed to tell the (false) story that Lynch peddled today. They simply ignored the savings and revenue!
Towards the end of the actuarial analysis (PDF), under a section titled “External Impacts of Evaluation”, comes this critical disclosure:
Medicaid Expansion can have many impacts outside of the direct cost paid for services provided to newly eligible individuals. Reductions in uncompensated care could result in less cost-shifting towards commercial payors. Paying higher, commercial levels of reimbursement for the newly-eligible population could further reduce the cost shift dynamic. The influx of a large number of lives into the HIX could help stabilize premiums by providing a larger base of lives, and could also entice additional carriers to compete for business in Nebraska. Impacts such as these have not been incorporated as part of this analysis. The focus has been limited to direct impacts of Medicaid Expansion as proposed by LB1032.
According to AARP Nebraska:
The bill will... boost Nebraska’s economy, supporting an estimated 10,000 jobs and generating about $175 million in state tax revenue.
Nor are the human impacts of failing to expand Medicaid being discussed by Nebraska’s embarrassment of a Medicaid Director. In a peer-reviewed journal article (open access), it was estimated that just in Nebraska the decision to not expand Medicaid costs between 67 and 212 preventable deaths, every year.
Counting 2014, ‘15 and ‘16—when by the way the federal government is paying 100% of the cost of expansion—that’s some 201 to 636 Nebraskans dead because of political intransigence. What’s the cost-benefit of that? Beyond the tragedy in deaths and morbidity, over these three years an estimated 6,000+ Nebraskans faced medical bankruptcy but would have been covered by a Medicaid expansion.
It’s inhumane for the public official in charge of Medicaid to not even acknowledge the human element at stake here. These are real people, living and dead Nebraskans. Read their stories.
Now, let me just briefly back-up to the actual meat and bones of the economic analysis. The so-called ‘woodwork effect’ was included as a direct cost of Medicaid expansion, although these people are already eligible for Medicaid coverage as is. Under a Medicaid expansion, the heightened awareness about Medicaid availability would lead these already eligible people to enroll in the traditional Medicaid program. Ignoring the savings and revenue of expansion, while including this indirect cost is suspect in my opinion and greatly inflates the cost.
How much? I’m not going to cost it out exactly, but a ballpark figure is $200 million. Yep. They calculate a woodwork population of 2,870, costing $464 per month with an annual increased cost of 6%, and my rough calculation is attached below.
Clik here to view.
