(Plain Press, March 2017) Speaking at the City Club on February 7th, Dr. Benjamin Sommers, a health economist and physician who studies health policy for vulnerable populations, shared his thoughts in a talk titled “Medicaid and Health Reform – past, present and uncertain future.”
Dr. Sommers said that while President Donald Trump and the Republican-controlled Congress have pledged to repeal the Affordable Care Act, they don’t have the required 60 votes in the Senate to do an outright repeal. However, they do have the votes to take away many of the funding mechanism for the Affordable Care Act through the budget reconciliation process.
This could mean a fundamental shift in how Medicaid is paid for and operates, said Dr. Sommers. He noted that currently States, based on their relative wealth, are reimbursed for Medicaid expenses from the federal government anywhere from 50 to 75%. Ohio’s reimbursement is currently around 63%. For Medicaid expansion under the Affordable Care Act the reimbursement is even more generous, starting at 100%, eventually going down to 90%.
According to Sommers, critics of this system say states don’t have an incentive to cut costs because the federal reimbursement is so generous and the system lacks flexibility. Medicaid experts in states say they have plenty of incentive to cut costs, but would like to see more flexibility.
One alternative – the Ryan Plan—proposed by Republicans in Congress would replace the current Medicaid program with block grants to States. Dr. Sommers said this would most likely result in more flexibility for States but they would get less money than now. Under the Ryan plan, funds for Medicaid expansion would also disappear. Over time, the block grant would not rise fast enough to keep up with the increase in health care cost, said Dr. Sommers. “It is really important not just how you set up a block grant, but 10 years from now, what does it look like?” said Dr. Sommers. He noted that health care costs always go up faster than inflation.
The Affordable Care Act has resulted in 20 million people having health care coverage that didn’t previously have coverage. Realizing this, some Republican Governors that have expanded Medicaid coverage are now saying “not so fast.” They say, you can’t take away coverage from all these people without something to replace it, said Dr. Sommers.
Dr. Sommers then shared some results of studies showing how expanding coverage impacts population health. He said the studies looked at two major expansions of coverage of low income parents, children and single adults before the arrival of the Affordable Care Act. The studies showed that the mortality rate declined for those getting health coverage. The declines in death rate occurred in areas that probably would respond to health care such as deaths due to heart disease, diabetes, high blood pressure and cancer. Also, Medicaid expansion recipients reported they felt better, they were more likely to say they could afford their health care and were more likely to have a primary care doctor.
Dr. Sommers said that, while it is a challenge to predict how many lives would be lost if the Affordable Care Act were to be repealed, the White House Council of Economic Advisors estimated in December of 2016 that 20 million people losing coverage would result in an increased mortality of 24,000 people. Dr. Sommers said research shows having coverage saves lives.
During the early years of the Affordable Care Act, Dr. Sommers says another study compared health care for low income populations in three states. The three states: Kentucky which chose Medicaid Expansion, Arkansas which chose the Private Option (private insurance for those eligible for Medicaid expansion), and Texas which rejected the Medicaid Expansion. The study found those getting health insurance reported better physical and mental health and were more likely to get regular care for chronic conditions such as diabetes. They were also more likely to get blood tests to determine health risks. Whether the insurance was public or private made no difference in care.
Dr. Sommers says the Affordable Care Act raised more money through increased taxes and fees than it paid out, so it has reduced the federal deficit. Medicaid expansion has had an economic impact on recipients. It has reduced the number of people whose medical bills have been sent to collection agencies. It has helped the finances of hospitals, and economists say it is likely it has some stimulus effect on the overall economy. Also under the Affordable Care Act a higher percentage of people have health care coverage than at any time in the history of the United States, said Dr. Sommers.
However, there is a cost. The Federal Government is paying more for health care. Dr. Sommers says it is a good investment which is saving peoples’ lives. “It is not free but, it is an investment I believe is worth making,” he said.