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Study: Mississippi Medicaid expansion costly in 2017-25

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JACKSON, Miss. (AP) — Expanding Medicaid would bring Mississippi more federal money from 2014 through 2016 but could cost the state millions of dollars from 2017 through 2025, according to a study released Monday by the state’s University Research Center.

Bob Neal, an economist at the center,  examines the economic impact of adding hundreds of thousands of people to the federal-state health insurance program for the needy, aged, blind and disabled — an option under the Patient Protection and Affordable Care Act of 2010 (PPACA).

Republican Gov. Phil Bryant has said repeatedly that he opposes expanding Medicaid because he believes it would be too expensive and he doesn’t want to increase people’s dependence on government.

Neal says in the study that, over the course of 30 to 40 years, “the benefits of Medicaid expansion might outweigh the costs.”

“Increased access to health care could enhance the overall health of Mississippi’s residents,” Neal says. “In the long-term, a healthier workforce should result in a more productive workforce, leading to a healthier, more robust economy.”

PPACA would require most Americans to buy insurance and could expand the number of people on Medicaid by raising the income ceiling for eligibility. A divided U.S. Supreme Court this year upheld a provision in the law that could impose a tax on individuals who fail to buy a minimum level of health insurance. But the court said the government could only push states to expand Medicaid programs by changing future Medicaid funding levels, not by changing the Medicaid funding arrangements already in place.

In states that allow expansion starting in January 2014, Medicaid could go to people whose income is up to 133 percent of the federal poverty level, or about $23,800 for a family of three, based on 2011 figures.

Each state currently sets its own income thresholds for Medicaid eligibility. In Mississippi, a family of three can have an annual income of no more than $8,160 a year, well below the 2011 federal poverty level of $17,916 annually.

Washington would pay 100 percent of the costs of expanding Medicaid from 2014 to 2016. Between 2017 and 2020, the federal share would decrease to 90 percent and the states’ contribution would rise in stages to 10 percent, where the law says it’s supposed to stay.

Bryant says Mississippi would face millions of dollars in administrative costs even in the years when the feds are paying 100 percent.

The university researchers’ study examines three scenarios: The high rate would be for 95 percent of newly eligible people signing up for Medicaid coverage, the medium rate would be 85 percent participation and the low rate would be 75 percent participation.

“We believe the high participation scenario is the most likely to occur,” Neal writes.

The most recent Medicaid figures show 641,573 were on the program in mid-September. That’s about 1 in 5 state residents.

Using the 95 percent participation rate, the study shows that 310,039 people could be added to Mississippi Medicaid by 2025. In that year, the state would spend $159.1 million more on Medicaid than it is spending now, while the state would receive an additional $63.3 million in revenue. That puts the state’s loss of money at $95.8 million.

If the federal government covered just 75 percent of the cost of Medicaid expansion in 2025, net state spending on Medicaid expansion could be about $86 million that year, Neal says.

Neal notes that more than half of Mississippi’s 82 counties had a shortage of doctors, nurses, dentists and other health care professionals in 2011.

“We are concerned that there will be insufficient health care professionals available to meet the increased demand for health care resulting from Medicaid expansion, as much of the state already suffers from a shortage of health care professionals,” Neal writes.

A retired state economist, Phil Pepper, said Monday that by 2020, Medicaid expansion could create up to 9,000 new jobs in Mississippi in a variety of health care fields.

“So, we’re looking at something that would generate as many jobs as Nissan and Toyota combined,” Pepper said at a forum sponsored by the Capitol press corps and Mississippi State University’s Stennis Institute of Government.

A retired state health officer, Dr. Alton Cobb, said at the Stennis forum that if Mississippi expands Medicaid, thousands of people could get more effective health care because they’ll have coverage for regular doctors’ visits and could stop relying so much on expensive emergency room visits for non-emergency cases. He said Mississippi ranks 7th in the nation for the number of emergency room visits per 100,000 people.

“Many of those visits are really for primary care services and are very inappropriate,” Cobb said. “It’s a very expensive way to render care.”

Census Bureau figures show 16.2 percent of Mississippi residents were uninsured in 2011, compared to 15.7 percent nationwide.


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