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Expansion of Medicaid will cost Iowa taxpayers more than it needs to

Published: Friday, March 29, 2013 11:38 a.m. CDT

Currently Iowa has 400,000 people enrolled in Medicaid.  The Fiscal Year 14 estimate is that this will cost $ 1.5 billion.  This is $88.5 million more than last year.  Medicaid costs grow every year regardless if expansion is approved or not.  Since 2000, Medicaid enrollment is up 88 percent and Medicaid expenditures are up 226 percent. With or without Obamacare, the cost of Medicaid is going up. 

There are between 51,000 and 82,000 people currently eligible for Medicaid but who are not enrolled.  The state is required to pay for these people at the current rate with or without Obamacare.  These people are not among the new enrollees, which the federal government promises to cover at 100 percent for three years.  So, the cost goes up again.  Under Obamacare, these people not only have to have insurance but they have to be enrolled in Medicaid.  Adding them is estimated to cost between $327 million and $564 million.

Finally, you have 150,000 people who will become newly eligible for Medicaid under Obamacare.  The federal government promises to pay 100 percent of the cost for these people for three years.  After that it will be: 95 percent in 2017; 94 in 2018; 93 in 2019; and 90 in 2020 and beyond.

I remain steadfast in my belief that it is unwise to trust the federal government to live up to its funding promises.  Interestingly, just last week the U.S. Senate voted to repeal one of the key revenue generators for Obamacare: the medical device tax.  The medical device tax is a 2.3-percent excise tax that kicked in this year and targets research and development.

With that revenue stream potentially gone, the Feds would be forced to find the money elsewhere.  A logical and easy place to go is lowering the percentage they will reimburse states for the newly eligible Medicaid recipients.  If that happens, the Feds wouldn’t deliver on their funding promises.  So the cost has the potential to go up yet again.

Additionally, a recent study from the Society of Actuaries shows that if Medicaid is expanded Iowans should expect an increase of 9.7 percent for non-group per-member-per month costs once the provisions of the Affordable Care Act are implemented.  If Medicaid isn’t expanded that expected increase drops to 5.5 percent for non-group per-member-per-month costs once the provisions of the Affordable Care Act are implemented.  This is a further raise in cost for Iowans.

Those that say expanding Medicaid doesn’t cost anything to the citizens of Iowa need to look again.  Medicaid is already going to cost more if we don’t expand it.  It does every year.  But Medicaid is going to cost even more if we do expand it.

In 2009, President Obama seemed to understand the Medicaid problem:

“I want to say this publicly.  As we move forward on health care reform, it is not sufficient for us simply to add more people to Medicare or Medicaid to increase the rolls, to increase coverage in the absence of cost controls and reform.  And let me repeat this principle: If we don’t get control over costs, then it is going to be very difficult for us to expand coverage. These two things have to go hand in hand.  Another way of putting it is we can’t simply put more people into a broken system that doesn’t work.”

I completely agree!  Pouring more money into a broken Medicaid system costs Iowa taxpayers more than it needs to.  Therefore, we need an Iowa solution that makes Iowans using Medicaid healthier.  It is the only way to control costs.

Right now we have a Medicaid program that people on both sides of the aisle believe is broken.  This broken system treats Iowans over and over for the same chronic diseases and the same medical issues.  And Iowa taxpayers keep paying for it, over and over.  And the cost goes up every year for the same treatments. At the same time, few of these Medicaid recipients are getting healthier.  Without a component that addresses making Iowans healthier in order to contain costs, we have no hope of resolving this dilemma.

In other news this week, I had the distinct honor of introducing a resolution, House Resolution 33, before the Iowa House of Representatives.  This recognizes Knoxville as the birthplace of the Iowa state flag and highlights Friday, March 29, as Iowa State Flag Day.  This resolution commemorates the 92nd anniversary of the adoption of the Iowa flag by the 39th Iowa General Assembly. This resolution also recognizes the contribution of Knoxville-native, Dixie Cornell Gebhardt, and her contribution to Iowa as the designer of our official banner.

I was honored to have fellow Representatives, from the neighboring districts of House District 28, join with me in presenting it on the House floor.  Those members were: Rep. Guy Vander Linden (R-Oskaloosa), Rep. Dave Maxwell (R-Gibson), Rep. Dan Kelley (D-Newton), Rep. Joel Fry (R-Osceola), Rep. Larry Sheets (R-Moulton), and Rep. Scott Ourth (D-Ackworth).

Practically everyone knows Betsy Ross and her place in American history.  My hope is that with this resolution more Iowans will come to know Dixie Cornell Gebhardt and her place in Iowa history.

As always, please feel free to contact me with your issues or concerns as they arise either by phone at (515) 281-3221), via email at greg.heartsill@legis.iowa.gov, or in person when visiting the Capitol.  I appreciate hearing from you and consider it an honor to be your representative.

Have a great Easter weekend!  He is risen!  He is risen, indeed!

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