By Katie Kerwin McCrimmon
Gov. John Hickenlooper has tipped his hand that he’s likely to push for Medicaid expansion.
The governor insisted that the decision to expand rests solely with his office, a contention that lawmakers challenged.
“Whether they can expand without additional legislation from the General Assembly is a little ambiguous,” said Eric Kurtz, a Joint Budget Committee analyst who briefed lawmakers. “I think they’re planning to work with the General Assembly. I think they’re just being cautious about not conceding an executive branch authority.”
“This is going to have to be a joint effort,” insisted JBC Chairman Sen. Pat Steadman, D-Denver.
Hickenlooper has repeatedly refused to say whether Colorado will opt for Medicaid expansion, and Colorado Medicaid managers at the Department of Health Care Policy and Financing have not yet released long-awaited cost estimates.
In response to questions from JBC analysts, Hickenlooper’s office said that cost estimates will be final by Feb. 15, 2013 and could be available sooner. The governor certainly could unveil detailed plans sooner, for instance at his January State of the State address. The governor has repeatedly stated that he’s concerned about unsustainable health care costs, and governors across the country fear that if they sign up hundreds of thousands of new low-income clients, states could face long-term budget-busting Medicaid costs.
The Affordable Care Act called for Medicaid expansion across the U.S. States were supposed to provide coverage for a large group of low-income adults who earn up to 138 percent of the poverty level, or about $15,000 a year for individuals or $32,000 a year for a family of four.
But when the U.S. Supreme Court upheld the Affordable Care Act, the justices said the federal government could not force states to expand Medicaid. So, governors and lawmakers across the country are in the midst of deciding whether to expand Medicaid coverage.
The enticement to expand comes with billions of federal dollars. Unlike most Medicaid programs where the federal and state governments split costs 50-50, the federal government will pick up 100 percent of the costs for expansion from 2014 to 2016. After that, state costs ramp up and are capped at 90 percent.
A recent national study estimated that Colorado would have to pay $858 million over the next 10 years to expand Medicaid. That study from the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute found that expanding Medicaid would bring states billions of dollars and could cut the ranks of uninsured in the U.S. by 21 million people, or about 48 percent.
In Colorado, the Kaiser study found that the federal share of the Medicaid expansion would be about $10.3 billion from 2014 to 2022.
Overall, Medicaid funding in Colorado represents about one-quarter of the state’s general fund and would stay flat from 2012-13 to the new budget year in 2013-14. Overall expenditures would be $5.6 billion, with $2.8 billion coming from the federal government.
Analysts believe Colorado’s Medicaid population will continue to swell as high as 800,000 people even without the formal Medicaid expansion. That’s because the health exchange — where people will shop for health insurance starting late next year — must divert people to Medicaid if they qualify.
JBC analyst Eric Kurtz predicted that full expansion could bring about 257,000 new Medicaid clients into the system. It’s difficult to estimate how much those new clients will cost. On the one hand, when people have not had health care and get insurance, there is often pent-up demand and they initially seek extensive care. On the other hand, the people who would be added to the Medicaid rolls would be slightly better off financially than other poor people (since their incomes would be between 100 and 138 percent of the poverty level). In general people with higher incomes tend to be healthier.
In case lawmakers wanted to do “back-of-the-napkin” estimates prior to receiving formal cost projections from state Medicaid managers, Kurtz estimated costs of about $2,800 to $3,800 per person per year. Recently, per capita Medicaid costs in Colorado have decreased, primarily because growth in the program has come from less-expensive new patients including children and their parents, rather than higher-cost clients, including the elderly and the disabled.
Ultimately, Kurtz told the bipartisan committee of lawmakers that the expansion decision is much like the cost-benefit analysis he’s making at his home this Christmas. He said his daughter is begging for an iPhone and has a long list of good reasons why she should receive one. On the other hand, there’s one big reason to say no, he said. “Cost.”