Op-ed: Is expanded Medicaid financially sustainable?
With the passage of the Affordable Care Act and the United States Supreme Court ruling regarding Medicaid expansion, states are thrust into the position of deciding whether to provide Medicaid coverage for individuals who did not previously qualify for such coverage under state guidelines.
By agreeing to provide coverage for all citizens of the state whose income is 100 percent of the poverty level or less, states qualify for federal money to cover individuals whose income is between 100 percent and 133 percent of the national poverty level. Federal dollars are promised to fully fund the expansion (but not administrative costs) for three years, then the subsidy ratchets down to 90 percent.
The question of whether this is the best way to increase access to medical care for Utah's poor confronts state politicians, especially Gov. Gary Herbert, who ultimately must make the decision. Virtually all observers agree that caring for those less fortunate is a worthy goal, perhaps even a moral obligation for individuals who have resources to meet their own needs.
Understandably, the cost of the proposed expansion is the primary concern for elected officials. According to one study, mandates in the ACA will require Utah to spend an additional $343 million to cover additional Medicaid enrollment of currently eligible children and parents through 2022. These costs are unavoidable.
In addition, if the Medicaid expansion is fully embraced, state spending would rise by an additional $364 million. Utah's leaders acknowledge that to meet these financial obligations, increased state revenue will be needed, with or without a decrease in spending in other sectors.
Because the Utah State Constitution requires a balanced budget, these are real dollars. The question of where those dollars will be obtained should probably not be postponed to a future discussion.
A second concern involves the promised funding from the federal government. The ACA pledges the vast majority of the financial support. However, it does not specifically identify where this additional funding will be obtained. Current federal taxes generate roughly $2.5 trillion yearly, with budgetary obligations of over $4 trillion. National politicians seem willing to tolerate this remarkable discrepancy, which has been increasing each year recently.
Under the present tax structure, the federal promises of funding for the Medicaid expansion (and, in fact, other entitlement programs with obligations up to $70 trillion) are based upon yet undefined monetary sources. This fact seems to introduce an element of unreality into the federal offers.
Together, these observations may create apprehension for observers (and state politicians) who are willing to ask how the federal government will provide their vastly superior portion of the costs of the proposed Medicaid expansion (and simultaneously fund all other federal entitlement programs). Â
Accordingly, Gov. Herbert faces critical questions as he decides the state's role in the Medicaid expansion:
Are Utahns willing to make the necessary sacrifices to cover the state's portion of the Medicaid expansion by paying more taxes and/or accepting fewer state services?
Is it wise to commit real Utah tax dollars in anticipation of promised federal tax dollars? Â
Is it possible that Utah would expand access and entitlements only to have the federal funding collapse or diminish in the future due to an inability further expand the national debt or to raise sufficient federal taxes?Â
Could future monetary restraints eventually require a retrenchment away from the access and health care services created and initially funded by the proposed Medicaid expansion? Â
Are there alternative programs that might be implemented to address the needs of Utah's poor that are sustainable and do not share similar uncertainties? Â
As a physician who worries about his patients who are uninsured, I wonder if it is compassionate to extend unfunded promises to Utah's poor. I'm glad I'm not the one who must decide.Â
Brian C. Hales is an anesthesiologist and former president of the Utah Medical Association and the Medical Staff at Davis Hospital and Medical Center in Layton.
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