Thompson: Medicaid Expansion Is A Positive For Arkansas

Editor's note: Dr. Joe Thompson, author of this commentary, is the Surgeon General for the State of Arkansas and Director of the Arkansas Center for Health Improvement.

While partisan national politicians continue to stumble toward a fiscal cliff, I am optimistic over the thoughtful, bipartisan approach our newly elected officials are taking toward complex and important decisions facing Arkansas.

Our health care system is at a tipping point, and the new federal health care law offers both opportunities and threats. Our state leaders are ready to find ways to use what is offered in the best interest of Arkansans. Provisions in this law can be used to complement work already underway to improve Arkansas’s failing health system. Across the state, we are already working on initiatives to improve quality and cost efficiency by changing the way we pay for health services, accelerate use of health information technology, strategically plan for a health workforce to meet our future needs, and reduce the number of uninsured Arkansans.

Why is this work so crucial to our citizens? Across our state, people are waking up this morning worried about that nagging shortness of breath, chest-tightness that comes and goes, a pain that won’t go away, or unexplained weight loss. Maybe it’s nothing—too often it’s an early sign of a catastrophic illness like heart disease, diabetes or cancer.

Heart disease is the leading cause of death in the U.S. and Arkansas has the fifth highest rate in the nation. We have the highest stroke rate in the nation. Over 10 percent of our citizens have diabetes. And, we have the second highest rate of lung cancer deaths in the country.

Most chronic diseases can be avoided or managed less expensively if caught early, but too many people won’t go to a doctor because they don’t have health insurance. So they get up and go to work. They probably won’t be as productive as they would be if healthy, but they show up until the day comes when they are so sick they can’t go to work and wind up in the emergency room. Then they face not only a serious illness but also bankruptcy over medical expenses they can’t afford. I’m not talking about just a few people. One in four Arkansans between the ages of 19 and 64 do not have health insurance. In some counties that number approaches 40 percent.

How long can our health care providers — doctors and hospitals — remain in business without getting paid by so many customers? Increasingly providers are forced to raise the price of care to those who can pay. This in turn forces private insurers to raise premiums, which in turn forces more people to forego coverage.

Once sick, disabled and poor enough, people qualify for public assistance. No longer able to work and with nowhere else to turn, they go from being a contributor of tax dollars to a user of services paid for with tax dollars. The real irony is that once disabled and on public assistance, they have a real incentive to not work to keep from losing the coverage the state provides. Doesn’t it make better sense to help our citizens stay healthy and productive on the front end and avoid paying the even higher price later?

In Arkansas, our chronic disease burden is higher than in most states while our median household income is much lower. The federal health care law provides valuable resources that will differentially benefit our state—resources we could never hope to have otherwise. It is up to us to use them to our advantage.

Extending Medicaid coverage to those who now qualify under the Patient Protection and Affordable Care Act is a chance for Arkansas to level the field by providing benefits to our citizens that other, richer states already provide. Why should our state be denied the benefit of federal funding that other states already have?

It is understandable to question taking on an additional 250,000 Medicaid recipients when our Medicaid program is facing a budget shortfall. What is not as easily understood is how doing so will actually help close that gap and even save the state money. In fact, health economist and Arkansas Medicaid Director, Dr. Andy Allison, has conservatively projected that Arkansas will save over $100 million in state fiscal year 2015 following the first full year of expansion. By 2021, the savings will grow to more than $500 million annually.

There are three basic components to Dr. Allison’s projection. First, several types of Medicaid coverage are currently being paid with 30 percent state money and 70 percent federal money. This includes more than half of all pregnancies in the state. Under the expansion, these services will be included in a complete coverage package paid with 100 percent federal funds for the first three years. By 2021, Arkansas’s share of the cost does increase to 10 percent—but this will be only one-third of what we pay now.

The second area of savings is a reduction in support the state currently provides to cover uncompensated care for services not included in the Medicaid system. This includes health services for those in city and county jails, mental health services at community health centers, and care provided to the uninsured at community and state-supported hospitals. State and local governments currently bear 100 percent of many of these uncompensated costs; with expansion, these needs are met as a covered benefit and costs will be covered entirely for the first three years and then at 90 percent by 2021 and beyond.

Finally, through Medicaid expansion more than $1 billion new dollars will flow into the state in payment for medical services each year. With this will come increased tax revenue and jobs, mostly in rural Arkansas, which has the highest uninsured rates.

I am grateful to live in a state where both political parties are willing to come together to consider options and work out evidence-based solutions. Medicaid expansion is a complex issue. But in Arkansas, we have always pulled together to do what is best for all Arkansans and I am optimistic that we will do so on this issue too.