Guest Column: Indiana can’t afford to sidestep Medicaid question

June 5, 2013

The Indiana General Assembly unfortunately adjourned without providing a framework for a Medicaid expansion plan. While it does set aside $250 million in a Medicaid Reserve Account, the “hands off approach” could cost the state $10.5 billion.

Instead of positioning the state to leverage the funds, Gov. Mike Pence has signaled a preference for submitting rote plans that are irreconcilable with the spirit of the Affordable Care Act. The rationale for the Affordable Care Act is that by enrolling everyone in some type of managed care plan, we will stop incentivizing emergency room visits. As a result we will be able to save billions of dollars by controlling costs and reducing chronic illnesses, such as diabetes and heart disease.

A limited expansion of Medicaid was supposed to be the thread that would sew up the safety net by providing coverage to people earning 133 percent of poverty or less. According to the Health and Human Services Poverty Guideline for 2013, a four-person family earning $31,322 or less is considered to be at the poverty level.

Most of the 363,000 Hoosiers who would be helped by Medicaid expansion work at least two jobs but are not eligible for health care coverage through their employers or cannot afford to pay their share of the premium. According to the Centers for Medicaid and Medicare, nearly 21,000 residents in Greater Lafayette and surrounding counties would be helped by Medicaid expansion, in turn reducing the burden on businesses and charitable organizations that currently pick up the tab.

The future of the Affordable Care Act is no longer a matter of debate. The long-needed overhaul of our health care system is underway and will soon be the new reality. The private health care industry, which runs the gamut from your family doctor to your insurance agent, has already spent billions of dollars changing the way it does business. If you don’t believe me, ask any IU Health Arnett or St. Elizabeth hospital employee how their organization has restructured to accommodate the Affordable Care Act. We will undermine the investment and hurt ourselves by not extending health care coverage to all Hoosiers.

The Affordable Care Act and Medicaid expansion, in particular, will benefit Indiana residents beyond improved access to health care. The return on the 10-year investment of $537 million is expected to be gigantic. The federal money will generate $108 million in new state and local tax revenue per year, stimulate the life sciences sector, pump between $2.4 billion and $3.4 billion into the state’s economy, create 30,000 jobs across all sectors of the economy by 2020 and hold hospital costs by insuring an additional 400,000 Hoosiers. On the flip side, under the Affordable Care Act, “disproportionate share” payments allotted to hospitals that serve low-income patients will be cut, shifting the burden to other consumers of the services. Hence, if the state fails to act we will be paying twice for the same services without receiving any benefit.

By being concerned more with politics than leadership and sending the federal government proposals incompatible with the act, Indiana risks forfeiting its fair share of the dollars and driving up the costs of health care for those of us lucky enough to have insurance. It is true that after three years Indiana will have to pay a 10 percent match, but that could easily be covered by the proceeds from the tobacco settlement or the money that had previously been allocated to state high-risk insurance programs (which is expected to be dissolved).

Unfortunately, the General Assembly sidestepped an opportunity to divert emergency room visits and ensure that a population already at high risk for disease receives treatment before short-term illness turns into something more permanent.

Please contact your representatives in the Indiana General Assembly as well as Gov. Pence if you believe the state should not delay any longer and position itself to claim the $1.7 billion already authorized under the Affordable Care Act for 2014.

Sincerely,

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