What’s Motivating The Medicaid Expansion?

Gov. Mike Beebe’s (D) decision to support an expansion of the state’s Medicaid program is re-igniting a health care debate likely to play out in this year’s legislative elections and next year’s budget process.

On Tuesday (Sept. 11), Beebe said he was “firmly committed” to accepting 100% payment from the federal government to expand the state’s Medicaid program from 2014 to 2017, a provision of the Patient Protection and Affordable Care Act. Beyond 2017, states will pick up payment of an incremental portion of the expanded Medicaid program, up to 10% by 2021.

The Governor said his concerns were addressed from federal Medicaid officials who have provided confirmation in writing and answered his questions on whether the state could opt out of the expansion in future years if finances dictated such a move.

The U.S. Supreme Court ruling in June upheld the individual mandate portion of the federal health care law. It also said states could not be penalized for opting out of a provision calling for expansion of Medicaid, a health insurance partnership between the states and federal government to help poorer citizens.

MOTIVATIONS
Beebe has telegraphed for weeks that he’d be supportive of a Medicaid expansion, which could bring health care to an estimated 250,000 Arkansans making 138% of the federal poverty level or less. Beebe said shortly after the Supreme Court ruling that he was “inclined” to support the expansion initiative.

In communicating his inclination, Beebe said additional Medicaid money would help hospitals, especially rural hospitals, that write off millions of dollars of indigent care annually. The Governor has argued that this not only helps preserve those health care outlets, but it also maintains jobs in parts of the state that may struggle to replace them.

It could be a strong election year message for Beebe to help deliver for local legislative candidates as he works to maintain majority control in the Arkansas House and Senate. Democrats hold a 53-46 advantage over Republicans in the House and a 20-15 lead in the Senate.

Beebe has argued that the three years of full federal government funding of the program is a “good deal.” He’s noted that Arkansas taxpayers will continue to pay federal taxes to support the program’s expansion regardless of whether the state participates.

Republicans have been skeptical of the expansion, expressing worries that the money is part of a larger national debt problem. The GOP is also explaining that the Medicaid expansion is a key component of “Obamacare,” a poll-tested popular message that excites the conservative base and sways independent voters.

GOP lawmakers have called on Beebe to be slow to push for an expansion and expressed skepticism that it could lead to an estimated $372 million in savings, a figure put forth by state Medicaid director Andy Allison earlier this year.

Additionally, Arkansas Republican legislators have wondered how the state would “de-enroll” the expanded group of Medicaid-eligible citizens, if necessary, after the three year 100% federal funding tapers off.

Privately, GOP operatives contend Beebe may be positioning Republicans to be a scapegoat if an expected Medicaid shortfall occurs. To expand Medicaid will take a three-fourths vote of both chambers of the state legislature next January, an unlikely scenario at this time no matter which party controls the capitol.

With Republicans likely leading a more conservative budget charge, they suspect Beebe will argue that the state could have had millions more in funding, but Republicans chose not to accept the money.

Nonetheless, Republicans will make every effort to tie Beebe and Democratic legislative candidates to an unpopular President Obama in Arkansas this fall as they push for legislative majorities.

THE EXPANDED POPULATION
At issue are the estimated 250,000 poorer citizens the state says would be served by a Medicaid expansion. Who are they and what characteristics do they possess?

The law says that eligibility for Medicaid would be expanded to those making 138% above the federal poverty level, which is currently $19,090, according to the U.S. Department of Health and Human Services. Under the expansion calculation of 138%, a family of three making $26,344 would qualify in 2014 assuming the current income threshold does not change.

Arkansas’ per capita income was $34,014 in 2011, the most recent number available.

Arkansas Medicaid officials based their expansion estimates on 2010 U.S. Census Bureau data that was recently analyzed by the national Urban Institute and the Robert Wood Johnson Foundation.

The analyzed data shows that in Arkansas there are actually an estimated 218,000 in the population that would be expanded under the new Medicaid effort. Another 36,000 are already eligible but have not taken advantage of the Medicaid program. So, in essence, there would be 254,000 eligible Arkansans if lawmakers fully adopted the Medicaid expansion now supported by Beebe.

The data further shows a plethora of information regarding age, race, sex, parental status and citizenship status.

AGE, GENDER & RACE
Roughly 56,000 (25.8%) of those with incomes below 138% of the federal poverty level are between the ages of 19 and 24, while another 53,000 (24.5%) are between the ages of 25 and 34.

The largest age category is for those between 35 and 54, about 79,000 (36.3%), and the smallest age group is between 55 and 64, roughly 29,000 (13.3%).

That’s a total of 217,000 and does not include currently Medicaid eligible citizens.

By sex, 51.5% of the estimated expansion population is male and 48.5% is female. Almost 29% are parents, while 71% are adults without dependent children.

By ethnicity, 67.7% of those who would be eligible for Medicaid under the proposed expansion are Caucasian or white. The second largest classification is African-American or black, which constitutes 24.1% of the eligible population. Another 4.5% are Hispanic and 3.7% are characterized as “other race.”

More than 99% are American citizens, while less than one percent are legal immigrants.