Georgia Gov. Nathan Deal has wisely resisted the lure of federal Medicaid dollars. Doubling down on faulty, unsustainable federal programs is what got this country into its current fiscal mess. What’s disappointing is that governors like Deal who request the flexibility to try new solutions are denied that opportunity. It’s “my way or the highway” with the federal government.
It’s inevitable: Americans will have to decide what’s more important: solving problems or scoring political points. The lack of access to health care is a real problem, but instead of being freed up to try new ideas, states are forced to choose the status quo or expanding a nearly 50-year-old Medicaid program with a history of unsustainable finances and questionable quality.
No flexibility, no innovation, no focus on patients. Funding programs doesn’t solve problems, and this is no way to solve our problems.
It’s no surprise that hospitals are worried. In order to get its way on Medicaid, the Obama Administration appears willing to cut hundreds of millions of dollars of federal funding for Georgia hospitals serving high numbers of low-income individuals. Atlanta’s Grady Memorial Hospital predicts it could lose $45 million, which will hurt people who have no other options.
Georgians have the luxury of examining the real-world results of similar Medicaid expansion in states like Arizona, Maine, Michigan, Delaware, Utah and Oregon. Contrary to conventional wisdom, a recent study by the Foundation for Government Accountability found the uninsured rate in these states remained virtually unchanged after the expansion and charity care costs continued to grow. In the best test case in Oregon, where careful quality measures were implemented, researchers found virtually no difference in health outcomes between those who received Medicaid and those who remained uninsured.
Georgia already provides Medicaid to the low-income elderly, individuals with disabilities and low-income mothers and children. Nearly one in five Georgians receive Medicaid benefits — an all-time high. As recently as 2000, it was less than 12 percent of the population. Spending has doubled since 2000, an increase of more than $4 billion in state and federal dollars. Medicaid’s growth crowds out other parts of the budget, such as education.
The proposed expansion is focused on non-disabled, low-income, working-age adults with no children. These new Medicaid recipients are projected to cost taxpayers well over $5,000 per person per year. To put this in perspective, each uninsured person costs taxpayers an average of $1,500 per year. If the Oregon study is at all accurate, Medicaid expansion would more than triple spending on able-bodied adults with very little if any improvement in health outcomes.
Just last year, the General Assembly was forced to raise provider fees by several hundred million dollars to fund a Medicaid shortfall. Even without Medicaid expansion, the state expects a $150 million surge in costs as more individuals sign up for coverage.
Then there is the aging of the Baby Boomers. Georgia’s Medicaid program already pays for over 75 percent of the $1 billion in nursing home care expenses in the state. These costs will soon explode: Georgia’s population of citizens over age 85 is projected to grow at a faster rate than all but two states.
Access to care in rural Georgia is threatened by severe physician shortages: 40 percent of our counties don’t have a pediatrician or general surgeon; half don’t have an OB/GYN. A survey last year showed about a third of Georgia doctors said they would not be taking any new Medicaid patients. Having Medicaid coverage without being able to find a doctor is like having an ATM card with an empty bank account.
The federal government promises to pick up the tab for most of the Medicaid expansion. We’ve heard that before. One example: The feds promised to fund education for special-needs students, but has fallen well short. The federal government’s current fiscal course is unsustainable. With Medicaid making up a very large and growing percentage of the federal budget, it is unrealistic to assume that cuts will not be made.
Georgia’s Medicaid program supports our state’s most vulnerable citizens. As with most top-down government programs, it struggles to contain costs and provide quality outcomes. Expanding this program will only make the current problems worse and possibly hurt the very people it was designed to help. The governor is right to refuse to be coerced into a bad deal for Georgia’s taxpayers and current Medicaid beneficiaries.
What could states do if given the opportunity? Low-income citizens could be offered refundable tax credits for low-cost private coverage and unused tax credits could support community-based resources. Nonprofits like the Georgia Charitable Care Network could expand their great work of providing care to more than 300,000 uninsured and indigent citizens every year. Targeted coverage for substance abuse and mental health treatment could be offered to support recent criminal justice reforms. Telemedicine could be expanded to leverage our existing physicians, expand access to rural Georgia and target individuals with chronic diseases.
Georgia has some of the leading health care institutions in the world. The state leads the nation in health information technology. Shame on us if we can’t come up with a better use of taxpayer dollars. We should continue to seek new ideas to help our most vulnerable citizens so that we don’t find ourselves in the same situation 10 years down the road.
Kelly McCutchen is president of the Georgia Public Policy Foundation (www.georgiapolicy.org), an independent think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians.