Virus Outbreak-Medicaid Expansion

Mississippi Gov. Tate Reeves delivers his State of the State speech on Tuesday, Jan. 26, in Jackson. Congress just sweetened the incentives for states to extend Medicaid insurance coverage to more low-income adults, but the dozen Republican-controlled states that have spent years resisting expanding the programs have no plans to change course now. Gov. Reeves says he’s not going for it, noting that his stance was a major issue in his 2019 campaign. His GOP primary opponents supported a plan to expand, with the state’s share being paid for by hospitals and a fee of up to $20 a month for people who signed up. He opposed it, even as the Mississippi Hospital Association said it could bring up to 19,000 jobs to the state.

The case for expanding Medicaid got a lot stronger this month, to the point that most any reasonable, rational consideration would conclude that now is the time for Mississippi to do so.

Under the Affordable Care Act — or Obamacare — the federal government would cover 90% of the cost of expanding Medicaid for two years to include people making up to 138% of the federal poverty level, or about $17,600 for a single earner. In Mississippi, that would mean expanding health insurance coverage to approximately 200,000 to 300,000 people.

That was incentive enough for most states. But the recently passed COVID-19 relief bill made the offer even more enticing by including billions of dollars for the 12 states that have not expanded Medicaid.

In addition to covering 90% of new Medicaid enrollees for two years, the federal government has agreed to cover approximately 5% of the cost for current enrollees — an estimated $16.4 billion if all 12 states took the deal.

The Kaiser Family Foundation estimated Mississippi would receive $690 million over two years. Other estimates put it at roughly $600 million. Either way, it’s a significant amount of funding.

How significant? At the lowest estimate, it’s still more than double what it would cost Mississippi to expand Medicaid over two years — estimated at between $200 million and $300 million. That means Mississippi would net more than $300 million over the first two years.

Making Medicaid expansion make even more sense, the Mississippi Hospital Association in 2019 proposed a way to cover the state share of Medicaid expansion. The plan — called Mississippi Cares — is similar to the Indiana model, which then-Gov. Mike Pence supported. The Mississippi proposal would charge $20 per month to participants and includes a $100 deductible for non-emergency care.

The association's members would cover the difference between those funds and the cost for expansion, estimated by MHA to be approximately $200 million. Hospitals are willing to pay this because it would still be less than what they currently are losing in uncompensated care, something that would be greatly reduced if Medicaid was expanded.

Opponents argue expansion would be too expensive once the federal match drops, but experiences in other states don’t show that. In fact, no state has lost money from expansion. In many states, job growth spurred by Medicaid expansion has actually increased state revenues enough to pay for the expansion costs. In Mississippi, estimates put workforce impact at up to 19,000 new jobs. 

Another argument is that expansion is wasteful, deficit spending that will have longterm negative effects on the national debt. That argument would hold more weight if many of the same people did not support other deficit spending measures. It is also important to recognize that Medicaid expansion is short-term deficit spending that is showing positive economic impacts in states, which offsets — at least to some extent — national debt concerns.

While Gov. Reeves has before argued both of these before, most recently he sticks to the political reason for opposition: Putting people on government assistance named after President Barack Obama is a bad idea. This was a popular political point for quite a while, but most states — Democrat- and Republican-led — have put this kind of rhetoric to rest in the Medicaid debate.

Mississippi should do the same. It’s time to expand Medicaid.

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