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Medicaid redesign is a win-win for business and taxpayers

Padma GadepallyExpanding Medicaid in Idaho could benefit Idaho more than almost any other state. That’s because the way Idaho now handles catastrophic medical costs places the burden squarely on the state taxpayer.

The Idaho Association of Commerce and Industry, which includes hospitals, St. Luke’s Health System and Saint Alphonsus Health System, favors expansion.

IACI has asked the state to look at a program in Arkansas that uses federal Medicaid expansion money to buy private insurance for Medicaid patients. Arkansas is the only state in the country that uses Medicaid dollars this way. The program is expected to be budget neutral, meaning it will not cost the federal government any more than a traditional expansion.

Currently, Idaho covers nondisabled adults under its state-federal Medicaid program only if they have children and make less than 20 percent of the poverty level, or $4,584 a year for a family of four. Idaho county indigent and state catastrophic programs pay more than $60 million annually for episode-based care, and 60 percent of claims submitted are denied. When Idahoans without coverage run up catastrophic medical bills, whether from accidents or disease, a county-state program steps in to help with the bills. County and state taxpayers pay 100 percent of the tab.

The governor’s task force on Medicaid redesign concluded last year that optional Medicaid enrollment would provide access to health care coverage for 104,000 uninsured Idahoans who have no access to regular health care. The task force found that would save $478,000 over 10 years. After subtracting costs of current eligibles, net savings are projected to be $84 million over 10 years. Expansion would cover those up to 138 percent of federal poverty level, or $31,000 a year for a family of four, and would end state and county obligations for medical indigency costs.

The federal government would pay 100 percent of the costs for the first three years, then phase down to 90 percent. This influx of federal funds would produce jobs, increase tax revenues and reduce cost shifting. Medicaid funding has a direct effect on Idaho health care service providers, supporting the jobs, income and purchases associated with carrying out health care services. Through the multiplier effect, other businesses and industries are indirectly affected due to the direct impact.

For example, a medical supply firm or a diagnostic services provider may be affected through its business dealings with Medicaid providers.

Many workers in small businesses would directly benefit from the Medicaid expansion. The firms wouldn’t need to pay for coverage of their employees, would face no penalty for not providing coverage, and would therefore be more likely to continue operations. In addition, there are almost 3,000 small businesses in Idaho with 20 to 49 workers, which would not be expected to provide health insurance coverage immediately. Medicaid expansion could increase their growth potential to 50 employees and beyond.

Increasing federal Medicaid funds could increase economic activity and employment, reduce employment costs for small and medium-sized businesses, increase productivity, and save money on health care.

Idaho Medicaid can be redesigned in a manner that is fair to taxpayers and beneficial to employers, adds provider accountability, addresses the inherent inefficiencies in the county indigent program and the state’s catastrophic program, and minimizes the cost shift to business. It can be a win-win proposition.

Padma Gadepally is a physician and a public health professional in Boise. She can be reached at padmaag@yahoo.com.

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One comment

  1. A common theme I’ve noticed, among proponents of Medicaid expansion, is that federal funding is viewed as a never-ending source of ‘free’ money. There seems to be a serious disconnection between fantasy and reality when it comes to addressing the national debt issue. Please, regardless of what the federal reserve practices, there is NOT a magical money tree!!!