BREAKING NEWS: Medicaid would cost state $95 million by 2025

October 23, 2012

Economic Development, Health Care

Expanding Medicaid to take in more than 300,000 of Mississippi’s uninsured working poor would cost the state about $95 million a year by 2025, though the federal government would be injecting from $800 million to $1 billion in Medicaid payments into the state’s economy annually.

That’s a key conclusion reached in an analysis of a possible Medicaid expansion in Mississippi conducted by the University Research Center, an arm of the Mississippi Institutes of Higher Learning.

In a press statement issued with the study, the Center said the state’s participation in the Medicaid expansion will provide short-term gains, but may cost the state more in the long term.

Republican Gov. Phil Bryant has said it would be too expensive to add hundreds of thousands of people to Medicaid under the federal health care law that President Barack Obama signed in 2010. He has vowed to resist having Mississippi participate in the expansion.

The state’s Medicaid program now serves about 800,000 poor children, pregnant women, disabled people and the elderly.

Washington would pay 100 percent of the costs of expanding Medicaid from 2014 to 2016. Between 2017 and 2020, the federal share would decrease to 90 percent and the states’ contribution would rise in stages to 10 percent, where the law says it’s supposed to stay.

The Center’s study looks at costs and benefits up to 2025. In that year, 310,000 Mississippians’ would have been added to the Medicaid rolls at a cost $159.1 million. Of that, an additional $63.3 million of federal dollars would flow into the state’s general fund, leaving the state with a cost of $95.8 million. Cumulatively, the state’s fiscal burden from 2014 (the first year of the expansion) through 2025 would be an estimated $556 million.

The Center’s projections are based on a high participation scenario of 85 percent in 2014, 90 percent n 2015, and 95 percent from 2016 to 2025. Participation would be expected to decline thereafter.

Early on, the state would see net gains financially, with a surplus of $9.2 million in 2015, $20.2 million in 2016 before the balance would shift to give the state a $2 million fiscal burden in 2017. By 2018, the state burden would rise to $30.8 and increase yearly before reaching $95.8 million in 2025.

The analysis does not make a recommendation on whether or not the state should expand its Medicaid rolls. The expansion decision will be up the governor and Legislature.

The Medicaid expansion was to be mandatory for the state’s but the U.S. Supreme Court in July ruled states can opt out.

If Mississippi does not opt out, the working poor who make too much money for Medicaid eligibility but not enough to be eligible for subsidies under the Affordable Care Act’s health care exchanges will have nowhere to turn for health care coverage,. They will either have to be treated by hospitals as uncompensated care or make arrangements with their doctors to make payments for care over long periods of time.

 

 

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