Thursday, July 12, 2012
There has been a lot of loose talk about the cost of Medicaid expansion, generally in an attempt to scare people. We need to look at it more realistically.
Mississippi is unlikely to realize an increase in enrollment as high as 300,000, simply because no program really enrolls everyone who is eligible. The Congressional Budget Office estimates that 57 percent of the eligible uninsured will participate. Also, the cost for each person enrolled is likely to be on the order of $3,000 per person per year. (Kaiser Family Foundation states the potential cost at $3,352 for adults).
If we realized this great enrollment, the federal government would pump $900 million into the state economy for the first three years, with no state match required. This would result in more than 17,700 jobs created, increased demand for services and an increase in tax revenue to the state of Mississippi estimated at $34 million per year, a windfall of $100 million over three years.
After the first three years, the federal share gradually decreases until it reaches 90 percent of the Medicaid cost in 2020. We can assume that $6 billion will be added to the state economy through additional Medicaid dollars over the next seven years. The cost to the state would be less than $250 million. The offsetting increase in state revenue could be as much as $210 million.
Over the longer 10-year period, we will see an increase of $8.5 billion in federal investment in Medicaid in Mississippi, providing health-care coverage to thousands, at a cost to the state of less than $500 million, offset by about $300 million in added revenues, or a net average of $20 million per year over the 10-year period. In fact, the cost is a mere $7 per Mississippian, per year.
In addition, the increase in the number of persons who have access to health-care financing helps the local economies of our communities. Most striking is that the failure to expand Medicaid could result in dozens of community hospitals going into bankruptcy, causing a severe loss of jobs. In many Mississippi communities, hospitals are either the leading employer or the second highest.
A healthier workforce should be one result of expansion, making life more productive. Remember, the cost of poor health to families and employers is much greater than the cost to the state of these health services.
Besides, our real mission is to improve the lives of our people.
We cannot afford not to expand Medicaid. It is an investment that will reap a great bounty for Mississippi.
Rims Barber heads the nonprofit Mississippi Human Services Agenda in Jackson.
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