Our Legislature is showing the good sense to forge ahead with industrial hemp, despite Governor Kristi Noem’s visionless resistance to jumping on that economic opportunity. Now if only we could get the Legislature to stiffen their fiscal spines and clear the tracks for another policy gravy train: Medicaid expansion!
We learned last year that Medicaid expansion was paying for itself in Montana. Two weeks ago, Montana legislators got an update: Medicaid expansion still rocks!
“The big numbers are roughly 6,000 jobs, roughly $350 million of personal income, $420 million of gross state product,” Economist Bryce Ward said at the state Capitol yesterday, presenting a follow-up to his April study on Medicaid expansion.
…”Those are reasonably-sized numbers,” Ward said, “that’s about one percent of Montana’s economy. That’s pretty big, there are several counties we can think of that are about that-sized” [Eric Whitney, “Republican Response Muted to New Medicaid Expansion Report,” Montana Public Radio, 2019.01.28].
But the Affordable Care Act is lowering the federal share of payments for Medicaid expansion, raising Montana’s yearly cost to $63 million. Surely the 36 states and D.C. that have signed on to the ACA Medicaid expansion are about to go broke?!
Nope:
But, Ward says, the actual hit to the state’s general fund will be a lot smaller, in part because the state saves money because as Medicaid now absorbs some substance abuse treatment costs and health care for prisoners.
“So that reduces the cost of the expansion by around roughly half,” he said. “And then we of course, as I mentioned earlier, get a whole bunch of new jobs, and then the tax revenues associated with those new jobs, and combined they add up to more than enough to pay for Medicaid expansion” [Whitney, 2019.01.28].
Along with making the budget better, Medicaid expansion is making Montanans better:
According to new survey results released, nearly half of the respondents (43 percent) reported an improvement in their general health since enrolling in Montana’s Medicaid expansion. Most respondents also reported improved ability to access medical care (69 percent) and dental care (51 percent), and nearly half (47 percent) reported an improvement in their ability to access needed mental health and substance use treatment services.
…“The survey shows that receiving coverage under Medicaid expansion has allowed Montanans to access needed medical care,” said MHCF CEO Dr. Aaron Wernham. “As a consequence, even so early in this program, many recipients already report that they are healthier” [Montana Department of Public Health and Human Services, press release, via Char-Koosta News, 2019.02.07].
Healthier economy, healthier people—it’s too bad South Dakota’s leaders aren’t willing to see the obvious benefits the Montana’s slightly more practical leaders have embraced.
The federal government pays about for 90 percent for that, with the state picking up the rest, an amount expected to hit around $63 million annually next year.
it doesn’t pay for itself.
Who ever could have guessed the Troll would be the first poster to attempt to start an argument with Cory- personally?
Did said Troll offer any FACTUAL evidence to back his claim?
Did he link to a reputable mainstream site for his evidence?
Are these magic grits?
I wrote on this subject in 2013. From the article: “Uncertainty about administrative costs, ultimate coverage numbers, and the long-term prospect for federal support combined to make Medicaid expansion a gamble for states. Some states have the financial capacity to take the risk. Other states disregard the risk, while still others, often influenced by healthcare provider groups, believe that Medicaid expansion will be a net positive for their state treasuries as well as for their people. State budgets are increasingly like the federal budget, with large percentages of expenditures classified as entitlements and revenues earmarked for specific purposes, such as education support. Most states cannot go into debt, except in very limited cases for capital projects, so running a chronic deficit is an option the federal government has that states do not.”
Note that healthcare provider groups such as the American Hospital Association are rethinking their support for Medicaid expansion, as reimbursement rates to providers are failing to cover provider costs.
For the full article, see: https://nonprofitquarterly.org/2013/10/18/counterpoint-on-aca-medicaid-coverage-gap/
Michael L. Wyland is a museum artifact. It’s too bad South Dakota’s leaders aren’t willing to see the obvious benefits the Montana’s slightly more practical leaders have embraced. (Healthier Economy, Healthier People) Taking advice on how to improve the economy shouldn’t come from an expert in NON-PROFIT groups.
Oh – god forbid if taxes go up to help pay for people’s healthcare – god forbid! We could never do that in South Dakota. Let them go bankrupt instead.
Better yet, just let them die.
Hear Ye, Hear Ye
~ Because the larger, prosperous states in America have decided that sending South Dakota more money every year [in order to improve, maintain and update the rural regions of our union] than South Dakota’s Fair Share is obligated to contribute (to America’s needs) SD has an absolute responsibility to better itself. Denying those in need within the state by refusing to accept the money we’re providing is highly un-American and must stop! The South Dakota Republicans with the power to hurt the most needy among the state’s citizens must immediately rescind their refusal to help and do what We The People have decided is best for America’s overall progress and well-being. NOW!
Actually, South Dakota is a net contributor to federal coffers, according to the Comptroller of the State of New York (another net contributor state). See: https://www.moneytips.com/is-your-state-a-net-payer-or-a-net-taker/356
It doesn’t surprise me Porter and MFI are leeching off of South Dakota.
Michael stated: “Actually, South Dakota is a net contributor to federal coffers,…”
The article you linked had no listed author. It cited one source, and then provided a link for selling you credit cards at the end of it. Here are a couple of reputable fact-checks on the claim that red states fund blue states:
https://apnews.com/2f83c72de1bd440d92cdbc0d3b6bc08c
https://www.politifact.com/new-york/statements/2018/nov/02/nathan-mcmurray/new-york-giver-state-federal-treasury/
Both articles cite a study done by the Rockefeller Institute of Government, a well-respected and non-partisan policy think-tank. The conclusion: Only 10 states give more than they get from the federal government, and they are all blue states with higher taxes. SD isn’t one of them.
Tag,
Are you calling the New York State Comptroller a liar?
I love it when people call partisan organizations non-partisan.
I will await the evidence you have proving the comptroller wrong Tag.
https://rockinst.org/issue-areas/fiscal-analysis/balance-of-payments-portal/
Here is the most recent iteration of that study, dated January 2019 (they must update it yearly).
There are actually two red states that get more than they give, ND and NE. The point still stands that SD is a “taker” state.
Jason, I’m not saying the NY Comptroller is a poor or biased source. I am saying that linking to an article from an obscure website that lists no author, and tries to sell you credit cards is probably not the most convincing argument from someone that, as a writer, should have a high standard of evidence for the point they are making.
There are ways of computing financial data that can twist the outcome to one’s political will. Simply fail to account for all the relevant data, for example.
AP fact checks and Politifact are both good reputable sources for disproving false claims, so when both of them disprove the claim that “red states pay for blue states” with the same think-tank’s study, I tend to put some weight on that. Of course, Think-tanks can and often do have bias. I’m not saying this one doesn’t. Just that it has a good reputation.
TAG: Thanks for the follow-up. The updated story does indeed show SD as a net “taker” in FY2017, changing its status from that of a net “giver” in the previous Comptroller’s report I cited.
I suspect, based on how close to the balance line both studies show our state to be, we may well shift from “giver” to “taker” and back many times over the years.
The other point to remember about states as federal “takers” is that the federal government, unlike many or most state governments, may run annual deficits and accumulate debt over time by act of Congress. This adds to the “giver” states’ balances and gives the feds more to “give.”
Michael: That may be true, with regard to SD’s status. A reasonable assumption.
With regard to the linked article you wrote in 2013, you referenced a study by the Kaiser Family Foundation. Like SUNY’s Rockafeller Institute of Gov, that is a very well-respected source of factual and low-bias data & analysis. Last year they produced an extensive, updated literature review on the effects of Medicaid expansion. Here’s the link:
https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/
The summary statement of key findings:
“This body of research suggests that the expansion presents an opportunity for gains in coverage, improvements in access and financial security, and economic benefits for states and providers.”
also:
“Overall, these findings suggest potential for gains in coverage and access as well as economic benefits to states and providers in the remaining non-expansion states that may be considering adopting the expansion in the future.”
TAG:
I don’t doubt you on that. My point is that other studies, especially those by providers, are sounding a more cautious note. The seeming unanimity in the healthcare community about Medicaid expansion is being tested as longitudinal data are being collected and analyzed.
For providers, the calculus was never about whether they would reap greater profits through Medicaid expansion. Instead, the issue was: would they lose less by serving more Medicaid patients than they would lose through uncompensated care by serving medically indigent patients?
In either case, hospital operating margins are shrinking, more than half of US hospitals lose money on patient care (part of the reason they are developing other nonprofit and even for-profit service lines to compensate), and hospital acquisitions and bankruptcies are commonplace news.
The concern about Medicaid and Medicaid expansion is magnified because most of the expansion in health insurance-covered lives has been as a result of greater Medicaid enrollment. This is due to both Medicaid expansion and outreach to uncovered but eligible people through the insurance exchanges.
As it relates to our broken healthcare system, and the exponentially high cost of it, there seems to be three actors that all are pointing fingers at each other. Providers, Insurers and Pharmaceutical companies. You will excuse me if I am skeptical of any research funded by any one of those three actors.
The truth is that when government steps in to negotiate prices of procedures, or drugs, like they do for Medicaid/Medicare/VA, somehow the exorbitant prices just magically go down. And that’s good for the fourth actor: the patients.
You may think that the providers always have the patient’s best interests at heart, but a system in which all Americans can afford health care will necessitate taking the air out of bloated hospital budgets, and especially the bloated salaries and staff of hospital administrators. It’s a sham to call hospitals non-profit when their corporate staffs make so much money.
Yes, I know Big Pharma is a major part of the problem, as well as exorbitant costs of medical equipment. Those medical supply companies make out like bandits. At the end of the day, all three of the above actors need to be collecting and spending less money for health care to be affordable. Sorry I don’t feel bad for any of them.
Troll, I is from iowa, as the name implies. How exactly do I or Porter from Colorado, leech off Northern Mississippi? Must be moar magic grits.
Troll, I is from iowa, as the name implies. How exactly do I or Porter from Colorado, leech off Northern Mississippi? Must be moar magic grits.
amount expected to hit around $63 million annually next year.
Without the expansion, Montana is on the hook for 40% of the costs, instead of 10%. Same as other ‘taker’ red states.
Sorry it took me so long to respond. It’s mid 50’s-low 60’s this week and I’ve been outside working in the garden.
~ South Dakota, you’ve had long enough. You’ve seen enough positive data. Your refusal to expand Medicaid has become an embarrassment to America. Get your act together or get put on restrictive probation!
When government steps in to negotiate prices, it does so as a monopolistic or ogolopistic entity. Its size, both in terms of buying power and its ability to dictate contracts, provide a perverse incentive to providers to go beyond competitive pricing to a model that guarantees the provider a loss they must compensate for by charging other payers more. Alternatively, they can do what I mentioned earlier – diversify their product and service offerings to seek compensating profits elsewhere in order to balance the corporate books.
I agree that hospital administrations are bloated, and have become exponentially more so since the 1960s and 1970s, not entirely coincidentally when Medicaid, Medicare, and private insurance combined to provide the bulk of provider revenues. Regulatory pressures contribute to this trend, as can also be demonstrated in the explosion of administration in educational institutions during the same period.
The use of the term “nonprofit” is often misunderstood. Nonprofits don’t take a vow of poverty. Rather, they pledge that their assets will be “owned” by the community, by the public rather than by shareholders. Further, they are regulated by the IRS in how, and how much, they may compensate their employees, vendors, and contractors (see IRC Section 4958). Nonprofit boards are required to demonstrate that compensation is market-based and not excessive. Further, these nonprofit boards are required by the IRS to assure that there is no “private inurement”; any relationship between the nonprofit and any entity where the entity receives greater value than does the nonprofit.
I’m enjoying this back-and-forth. Thank you!
Oops – spell check got me! Ologopolistic is what I meant to say – characteristic of an oligopoly.
Porter:
I remember walking the streets of Genoa and Venice with my father in the late ’60s. He was so disgusted with the state of affairs in Italy he said that the UN should take it over and run it as a protectorate. He was kidding, of course, but the frustration was there, nevertheless.
One pesky problem with democracy is that the freedom to choose includes the freedom to choose incorrectly or, at least, incorrectly as it may appear to others.
This oughta swell yer wingnut hearts with pride.
https://www.usatoday.com/story/news/politics/2019/02/12/national-debt-tops-22-trillion-first-time-ever/2849978002/
Let’s cut more entitlements so the koch bros can receive more entitlements.
Not to hijack the thread, but I am thinking millions of women might have a bone to pick withn this statement- One pesky problem with democracy is that the freedom to choose includes the freedom to choose incorrectly or, at least, incorrectly as it may appear to others.
Freedom to choose or not so much.
Mr. Wyland, Italy is not a good example of what we allowed in the Marshall Plan by basically putting in place a government that fundamentally would not work. The Marshall Plan also was pretty stingy on the amount of assistance doled out to Italy. So yeah, your pop and you saw Italy as divided as was intended. Democracy is only as good as what the government allows it to be. You can only have democracy when you have confidence in your government to protect you with all in it’s powers to do. Healthcare is one, like Medicare from 1964 to present. Social Security, what we finally copied from medieval Europe, helped to protect our old age. https://www.ssa.gov/history/briefhistory3.html
If we Americans would run our Social Security systems like the Europeans, we could collect increased taxes that would cover healthcare, cover unemployment, cover disability and also cover family leave while not breaking the bank. Elected officials should never ever be able to deny coverage or to undermine existing programs as these should be the very pillars of what democracy stands for. In short, you would not have to be 85 years old and sacking groceries for bare minimum…unless you want to.
I’m not by any means an expert in any of this, but you can’t explain away the fact that the price of a given procedure, instead of being set by “the market” is, instead set by individual negotiations with insurance companies. The same procedure can vary wildly in price from one patient to the next, based mainly on their insurance provider’s negotiating skills.
This would be fine if we were talking about negotiating the price of a sports car, instead of life-saving procedures. A person having a heart attack doesn’t have the luxury of shopping around for the best-priced emergency room.
Free market is not an appropriate model for health care, and government programs are not the reason for high health care, either. When there is no regulation on pricing, providers can and will charge whatever they can get away with. Not an appropriate model for what should be a basic right to health care.
The non-profit status can also work towards higher prices, since hospitals have to have a net zero profit, they will simply overpay for things like medical equipment. Similar to the old cliche of the $500 dollar wrench for the military.
Jason, the economic analyst just said it pays for itself and explained how. You have no evidence refuting that analysis.
Medicaid expansion pays for itself in exactly the way that the Trump tax cuts do not.
TAG:
The corruption of the market-based model in healthcare began in the 1940s and 1950s with the rise of private health insurance. Placing third parties between the patient and the provider allowed both the patient and the provider to discount or ignore prices. In fact, this was considered a *feature* of the third-party payer model – patients and providers could focus on quality outcomes without regard to charges or costs.
It’s true that individuals don’t shop for care when they need emergency surgery. They can, but often don’t, shop for care for elective surgery, preventive care, etc. Health insurance disincentivises shopping; my copay is my copay anywhere as long as it’s “in network” and the insurance company/Medicare/Medicaid will usually pay the rate they have negotiated with the provider.
Since I have a high-deductible health insurance policy tied to an HSA, I shop around for basic care and I question the need for every recommended test – until I reach my annual “stop loss” amount. After that, it’s Katie bar the door! Every procedure I can think of that qualifies as “medically necessary” is added to the “to do” list by my providers and by me. My economic incentive is to sweat the small healthcare stuff and ignore the huge charges when they come along. My gall bladder cost $120,000 in 2015? No problem – my out-of-pocket maxed out at just over $5,000, easily paid out of my HSA savings account. The rest? That’s for the insurance company to sweat over – until they raise my premiums and everyone else’s to cover all the claims they pay.
Imagine what would happen to healthcare prices if providers had no access to third-party payments? To be economically viable, they would need to set prices based in large part on what patients could afford to pay using personal resources. Would fewer services be available and would there be fewer providers? Perhaps, but it’s impossible to know what such a huge economic shock might produce. There are many possible scenarios, including not a few that would be disastrous for a few patients and beneficial for many – much like the present American healthcare market.
Net contributors or not, it makes economic sense for us to get as much return on those payments to Uncle Sam as we can. We are turning down easy money and better health outcomes for South Dakotans, because some Republicans would rather score ideological debate points. Shame on us.
So hospitals are concerned that Medicaid reimbursement rates aren’t high enough. But one of the primary complaints about the Affordable Care Act has been that it did nothing to control costs. I feel a serious bind here. People need coverage, especially the poor. But how are we supposed to keep that coverage affordable if we reimburse hospitals at the same old high rates that have the U.S. spending twice as much per capita on health care than anyone else?
I don’t know if Medicaid reimbursements are the proper tool to try bending the cost curve, but if we increase reimbursements, do we fuel rising costs?
I understand the problem Michael describes of our insulation from cost in health care. I wonder: would there be a way to socialize medicine but still tie our sense of the cost of health care to the taxes we pay for socialized medicine?
I keep going back to the price list. Every pill should be stamped with a price tag. Hospitals should have price signs like gas stations. Sanford and Avera should be required to put on their billboards the prices of the services they advertise.
Medicaid reimbursement rates have never been as high as private insurance, though they are better than Medicare reimbursement rates. The squeeze comes in as: 1) a higher percentage of a provider’s patients are Medicaid-covered; 2) state governments restrict Medicaid reimbursements as Medicaid takes up a greater share of state budgets even before increased reimbursements are factored in; 3) providers are incentivized to inflate charges (think MSRP for a car) because they know payers will insist on reimbursements far below stated charges; 4) private insurance insists on more and better discounts: a) seeing what government is able to negotiate; b) squeezed by their own decreasing investment returns; and c) unable/unwilling to continue funding the cost-shift from indigent care and government-paid healthcare; and 5) patient-paid charges fall further behind both charges and costs while more patients default on bills or are referred to collection agencies (thereby increasing providers’ collection costs).
There are so many moving pieces in the healthcare finance puzzle that no one (I specifically include myself) can explain it comprehensively. Hillary Clinton and her planning team attempted and failed to do so in preparation for the 1993-1994 reforms labelled “Hillarycare.” The proponents of the ACA knew from the beginning that they were omitting key pieces of the puzzle in their attempt to structure a integrated delivery model for captured patient lives.
Medicaid costs for states and the federal government will rise, if only because more people will be eligible for and use Medicaid as their health insurance. Any increases in per-patient or per-procedure reimbursements will be costs in addition to the costs associated with increased patient lives under the program.
In 2020 and beyond the federal gov’t will cover 90% of Medicaid expansion costs to the states. Wyland and selfish Obama haters can visualize imaginary problems until the cows come home. Any tweaking necessary will be easily accomplished with even a moderate desire to do so. If South Dakota can’t figure out how to come up with a measly 10% to help the needy among you, Colorado and other wealthy states will chip in.
https://familiesusa.org/product/50-state-look-medicaid-expansion
Cory brings up a conundrum that has been present since Plato (in The Republic, I think) – how can feel individual ownership of a shared asset?
One uncomfortable part of that calculus would be to assure that the tax structure insured that all residents are taxpayers supporting the Medicaid system. Otherwise, Medicaid becomes something I get but don’t pay for.
Price transparency is a laudable goal and achievable if one is looking at discrete things like medications and equipment.
It becomes more difficult when one looks at procedures, because patients may be similar, but seldom the same.
For example, I go to Sanford for my gall bladder surgery and they find I have sufficiently high blood pressure that it requires treatment before I can have my gall bladder removed. I’m in the hospital an extra day or two, require medications unrelated (or only incidentally related) to my gall bladder removal, and have extra visits from nurses, techs, and the hospitalists on duty each shift.
For example, the vaginal delivery I expected for my wife suddenly becomes a Caesarean section (C-section). Then the baby is born with a condition requiring NICU time or, less seriously, common anemia issues requiring the “grow lights” in the nursery for a day or two.
I can look at a range of charges based on historical patient usage, but there are no guarantees because each patient’s situation and needs are different.
I’m all in favor of publishing the fee ranges, giving providers latitude to say, in effect, “your mileage may vary.”
And, yes, traditionally the hospital’s aspirin, slippers, toothpaste, toothbrush, and water bottle were drastically overpriced (think $500 hammer) as a way to accomplish the cost-shift to cover the uncovered costs of care for Medicare, Medicaid, uninsured, and medically indigent patients.
I thought Gov. Daaugaard and his Medicaid expansion task force came up with a pretty good solution – get the feds to reimburse the state for the Medicaid costs of Native Americans receiving care elsewhere they they were entitled to receive through IHS. Those funds apparently would have paid for Medicaid expansion without the state’s incurring additional general fund expense.
Blaming it onto the Natives has always been the argument and it doesn’t make sense. Here is a current report dated February 11, 2019 that indicates Montana is way ahead of our lame horse state. If only we could find a way to corrupt Medicaid Expansion, the trumpers would be all in
“Medicare and Medicaid contain per enrollee health spending growth better than private insurance. https://www.rwjf.org/en/library/research/2019/02/slow-growth-in-medicare-and-medicaid-spending-per-enrollee.html
“Conclusion
The authors conclude that Medicare and Medicaid have successfully moderated growth in spending per enrollee over the last decade and do not require major restructuring to lower national health spending. Overall, Medicare and Medicaid are doing a good job of keeping per capita costs under control, and the continuation of recent policies is critical to sustain this control. The larger cost containment problems the nation faces are in the private insurance market.”
So there ya go, eliminate for profit insurance companies, and you will have won the war. Not to hard to see why insurance outfits have the open checkbooks to the faces in the trough. When you see healthcare traded on Wall Street it should open your eyes to know that the CEO’s have got so show profits quarter in and quarter out to not only get the golden parachutes, but also to keep their fleece going.
Republicans and Democrats have a spending problem.
Federal Revenues Hit All-Time Highs Under Trump Tax Cuts
https://www.investors.com/politics/editorials/trump-tax-cuts-federal-revenues-deficits/
Jerry:
I think the commission was blaming the feds, not the Native Americans. The feds are contractually obligated to provide 100% of health care that they aren’t, and the state is stuck with the bill (or at least approximately 60% of it) under Medicaid.
The presence of for-profit health insurance in the market may or may not be a “problem” in US healthcare (it’s highly debatable), but it’s not a problem we have in South Dakota. The three largest health insurance companies operating in the state are all nonprofit – Wellmark BCBS, Avera/Dakotacare, and Sanford.
Daugaard’s years of Medicaid expansion delay and IHS funding recoupment are highly debatable as a solution
Michael’s right, Jerry: nobody’s blaming Indians here. While Leslie is right that Daugaard’s delay inexcusably lost us a shot at huge fiscal and health benefits, Daugaard’s plan to make Medicaid expansion budget-neutral right out of the gate, before we even got to the economic stimulus, was smart and is still worth doing. The feds were open to it; it’s only Noem and Republican Legislature who stand in the way.
North Dakota expanded Medicaid and that state has a large Native population. New Mexico expanded Medicaid and has a large Native population. Daugaard chose to do the one thing that he knew perfectly well would fail and he was successful.
Hide and watch, if we here ever try to install Medicaid Expansion, it will fail like all the rest of the public supported initiatives we have tried, as the legislature will kill it if we put it on the ballot and win.
As a native, it you live off the reservation and not in Pennington County, who is liable for the bills incurred? Say you live in Meade County as an example, are you in IHS network?