THE BLOG

The Real Math on Medicaid

06/18/2013 05:19 pm ET | Updated Aug 18, 2013

I believe in giving credit where it is due, and Arizona Governor Jan Brewer's brave -- and smart -- decision to put people -- and math -- over politics when it comes to health care gets a big nod of approval.

Gov. Brewer broke company with a number of her fellow Republican governors back in January when she announced that her state would expand its Medicaid program under the Affordable Care Act. Last month, she put her money where her mouth is when she announced that she would start vetoing unrelated bills until the state legislature adopts the expansion -- she did and this week the legislature has approved it .

In Texas, by contrast, the legislature, acting with the full support of Gov. Rick Perry, just passed a bill prohibiting expansion of Medicaid.

In other words, Texas just said no to about $100 billion in federal funds over the next decade -- funds that would expand the state's current program, which only covers nondisabled adults if they are parents earning 25 percent or less of the federal poverty level (less than $5,000 a year for a family of three), to cover all adults aged 19-65 earning up to 138 percent of the FPL. A full quarter of people uninsured in Texas would have been eligible for coverage under the Medicaid expansion -- about 1.5 million.

Surely Gov. Perry had a reason to leave millions uninsured and $100 billion on the table. After all, how much would the expansion cost Texas?

For the first three years, the additional services would cost nothing. You read that right. Eventually, the state would be asked to cover up to 10 percent of the expenses related to the expansion, but those would be significantly offset by the savings that come when people can access quality health care, like a reduction in avoidable emergency room visits and state savings on mental and public health services that the expansion would cover. Even factoring in administrative expenses, the Kaiser Family Foundation estimates that the expansion would have increased Texas' Medicaid costs by only 2.3 percent between 2013 and 2022.

Texas is one of roughly 20 states that have rejected or are leaning towards rejecting the expansion, a choice the Supreme Court allowed them to make in its decision on the ACA. According to the Urban Institute that's 5.7 million uninsured people who would finally have access to coverage except for where they live.

Why has Gov. Brewer parted ways with her fellow Republican governor on this hot-button question? I suspect it's because she has looked behind the political rhetoric and understands a few key facts:

Medicaid is not a broken system. Saying something a lot doesn't make it true, and study after study have shown that Medicaid delivers care comparable to private insurance for less -- much less -- and that people with Medicaid have more access to health care and better health outcomes. For example, and as the Center on Budget and Policy Priorities has noted, "expansions of Medicaid coverage for low-income pregnant women led to an 8.5 percent reduction in infant mortality and a 7.8 percent reduction in the incidence of low birth weight."

Sure, there are ways in which the program can be improved -- my organization, the National Health Law Program, spends a lot of time working on those -- but overall it works. That's why every state in the country -- even Texas -- participates in it.

Emergency rooms are not a substitute for adequate health insurance. As I have written here, emergency room triage is among the most expensive health care delivery option out there and, because it does not include follow-up maintenance and treatment, the least effective way to manage chronic conditions, which make up the bulk of health care costs. If we are going to direct public funds to a health care system, shouldn't we go for one that is less expensive and more effective?

Without the Medicaid Expansion, most poor people will have no access to health insurance at all. This is a key point, and one that is often glossed over. The Affordable Care Act requires that everyone have health insurance by January of 2014. It offers several options to help lower-income people pay for health insurance. People who earn between 100 percent and 400 percent of the FPL will be eligible for a subsidy to help them pay for insurance and, until the Supreme Court's decision made the Medicaid Expansion optional, everyone making less than 138 percent of the FPL would have had access to Medicaid.

Unfortunately, the expansion is no longer mandatory, and Congress did not draft a Plan B. So if you live in a state that has not accepted the Medicaid Expansion and you earn less than 100 percent of the FPL (roughly $11,500), you are eligible for neither Medicaid nor a subsidy to help afford insurance. You will not have to pay a tax penalty, but that will hardly be a consolation if you get sick.

This perverse outcome keeps affordable health care out of reach for millions of the poorest people. It is a choice of political calculation or practical math. I just hope that over time more states look at the real numbers and do the right thing.