The Consequences of Obamacare: Impact on Medicaid and State Health Care Reform

Strategic Insights -

The hearing of the House Energy and Commerce Committee, chaired by Representative Fred Upton (R-MI), brought together four state governors to discuss the consequences of Obamacare on Medicaid and state health care reform. The witnesses were Utah Governor Gary R. Herbert (R), Massachusetts Governor Deval Patrick (D), Mississippi Governor Haley Barbour (R), and Representative Brett Guthrie (R-KY) questioned the governors about the impact of the Affordable Care Act on their state's Medicaid programs.

Key Takeaways:

  • The Affordable Care Act will result in a 50% increase in Medicaid eligibility for Utah, leading to a dramatic increase in the state's budget and requiring either tax increases or service cuts.
  • Medicaid spending is more concentrated among seniors and the disabled, who make up 10% and 19% of beneficiaries, respectively, but account for 23% and 44% of the total cost.
  • Cutting back on eligibility for adults and children will save states money in the short term, but will ultimately lead to higher costs for emergency rooms, physicians, and hospitals as uninsured individuals seek care.
  • Innovation in delivery systems, rather than cutting back on eligibility, is a more effective way to reduce costs while improving the quality of care.
  • States can use the Affordable Care Act's tools to help control costs, such as demonstration projects to structure and implement new delivery models.
  • The discussion about Medicaid is not just about costs, but also about the kind of country we want to live in and the values we prioritize.

Statistics:

  • $443 million: The cost of the Medicaid expansion in Utah.
  • 50%: The increase in Medicaid eligibility for Utah.
  • 16.5%: The annual cost increase of Medicaid in Mississippi before reduction.
  • 4%: The annual cost increase of Medicaid in Mississippi after reduction.
  • 1.5 billion dollars: The annual cost increase of Medicaid under the Affordable Care Act.
  • 23% and 44%: The percentage of Medicaid spending for seniors and the disabled, respectively.
  • 10% and 19%: The percentage of Medicaid beneficiaries for seniors and the disabled, respectively.
  • 25% of the cost: The cost of children as a percentage of Medicaid spending.
  • 13% of the cost: The cost of adults, including pregnant women, as a percentage of Medicaid spending.

Sources:

  • Federal News Service (Part 7)
  • Representative Fred Upton (R-MI)
  • Representative Brett Guthrie (R-KY)
  • Governor Gary R. Herbert (R)
  • Governor Deval Patrick (D)
  • Governor Haley Barbour (R)