Analysis of Medicaid expansion under final review

Economic experts are reviewing a completed state study examining the fiscal implications for Mississippi in expanding Medicaid rolls under federal Affordable Care Act.

In the balance is an infusion of $9 billion of federal money into Mississippi’s health care sector to help fund an expansion of Medicaid eligibly to include at least 250,000 low-and-moderate-income working people. The added Medicaid eligibility would cut the number of uninsured Mississippians by about 54 percent, according to Kaiser Foundation estimates.

The rub is that the state must pick up about 10 percent of the funding after the first three years. Estimates of state costs range from $429 million (Kaiser Foundation) for a six-year period from 2014 to 2020 to $1.6 billion (Milliman Inc. consultants) over 10 years.

The job of sorting out the numbers has fallen to Bob Neal, senior state economist. He called the Medicaid analysis he embarked on in late summer one of the most important projects of his lengthy career. Last week he said he is confident in the completed study’s modeling and projections, though he declined to provide details.

“I’m comfortable with the study out for review,” he said.

Reviewing the report are economists with expertise in “impact analysis” and in the Medicaid area.

Neal said he expected the final two reviews to be completed by week’s end.

The analysis is to go to a Legislature skeptical of proposals to opt into the Affordable Care Act’s Medicaid expansion, a provision that had been mandatory for the states but became optional under a mid-summer ruling by the U.S. Supreme Court.

In August, 640,427 Mississippians received Medicaid, the state-and-federally funded health care program for poor children, pregnant women, disabled people and the elderly. Mississippi, as the poorest state in the nation, gets the highest federal share among the states — currently just over 73 percent, according to the Associated Press.

Gov. Phil Bryant has not said with full certainty he will reject the expansion, but he has emphasized he is not inclined to support what he says could become a huge burden on state payers. Legislative leaders have voiced similar sentiments.

Just how big a burden the expansion would entail is addressed in Neal’s soon-to-be-released study. “It has to be primarily about what the cost is to the state,” he said.

Neal said he worked to make the study as accurate as he could. “There’s no point in delivering something that will have to be amended later,” he said.

Just how many Mississippians would land on the Medicaid rolls are uncertain. That forced Neal to run three scenarios based on new participation — high, moderate and low.

The expansion entails making eligible state residents who earn up to 138 percent of the federal poverty level. “My high-end estimate at 138 percent is not as high as the 400,000 (new enrollees) that are frequently mentioned,” he said.

Meanwhile, as states grow anxious about taking on the fiscal burdens of increasing Medicaid, a proposal to reduce eligibility to 100 percent of the poverty level — instead of the 138 percent — is increasingly mention, according to Neal.

“That’s a discussion that has gained traction,” he said, though he expects any lowering of the eligibly range would be up to the federal Center for Medicaid Services, a division of the Department of Health & Human Services.

The Center has not provided guidance on the issue, so some states are thinking they may have latitude to select the 100 percent option, he said. “Since the Supreme Court shot down the mandatory provision and made participation by the states optional, there is some thinking that the states can select the 100 percent option.”

Neal said he is proceeding with an analysis of the lowered eligibility option.

His analysis did include an examination of the fiscal stimulus the state would gain through $9 billion in federal health care money from 2014 to 2020. “We certainly looked at the stimulus side,” he said.

Also explored, he said, was the effect on state hospitals of losing about $152 million in a year in federal money to help cover the cost of treating uninsured patients. “Suffice to say we did look at reductions in the DSH (Disproportionate Share Hospital, or DSH, payments),” Neal said.

Mississippi hospital officials say they are unsure how they would offset the loss of the Disproportionate Share Hospital payments should the state decide not to participate in the Medicaid expansion.

The payments are to be eliminated and replaced by the new federal Medicaid expansion money. States that opt out of the expansion will have to plug the fiscal gap themselves, officials say.

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