Colorado’s Medicaid Expansion Plans Make Sense

Governor Hickenlooper’s announcement last week that Colorado plans to expand Medicaid eligibility to more than 160,000 childless adults has been met with much debate from both sides of the political spectrum.  The voices opposed to the expansion come mainly from an economic perspective, saying that we just can’t afford to cover more people with Medicaid.  And as is usually the case, there are wildly different estimates of how much the Medicaid expansion will cost and/or save the state over the next decade:  The Kaiser Family Foundation says that the move will cost Colorado $858 million over the next decade, while Governor Hickenlooper’s office says that it will save $280 million instead.

Colorado Medicaid Expansion DebateAfter all of the money talk from the CBO and all of the special interest groups over the last few years regarding various aspects of the ACA, I think a lot of people have become numb to the numbers.  Predictions of how much any healthcare legislation will cost or save over any lont-term time horizon really depend on who is doing the study and what variables they took into consideration.  And we have to bear in mind that laws and reforms and healthcare in general are not static entities; they’re constantly changing, which makes long-term financial predictions murky at best.  Even if we could control for every single current variable and come up with an accurate picture of the cost and/or savings implications of the Medicaid expansion, we can’t know what additional changes might be made in the future that will increase or decrease the predicted amounts.  Given that reality, as well as the dramatically different financial predictions out there, I think it’s best to assume that the actual numbers will be somewhere in the middle of all the extremes.

I’ve always found it a bit odd that Medicaid in Colorado – and in most other states as well – is available to non-disabled, non-elderly (but impoverished) adults only if they are pregnant or have children.  Eligibility is based on federal poverty level (FPL) numbers, but the recipients must also have children or be pregnant, unless they meet additional criteria, such as being blind.  Poverty level is dependent on the number of people in the household, so it already accounts for the presence of children:  A single person with an income of $15,000 last year would not be considered to be below poverty level.  However, if that person had a child living in the house too, that same income would qualify them as below poverty level ($15,130 for a two-person household).  I have long wondered why there is a distinction made between impoverished adults without children and impoverished adults with children when it comes to providing public health insurance.  In both cases, the people are in need of coverage and unlikely to be able to afford it on their own.  And from a devil’s advocate position, is it possible that we’re inadvertently encouraging people to have children in order to qualify for Medicaid?  Colorado does have an Adults without Dependent Children (AwDC) provision that is currently part of the state’s Medicaid program.  But it’s limited to 10,000 people and there’s a waiting list.  And the income limits are very low:  $90/month or less for a single individual, and $125/month or less for a married couple.  That’s a tiny fraction of the federal poverty level, and excludes a large number of Colorado adults who have low incomes.

Although I’m sure there will be some financial hiccups along the way, I think Colorado’s plan to expand Medicaid to childless adults with incomes of up to 133% of FPL is a good move.  These are people who are some of the most likely to be uninsured if Medicaid is not available to them.  That means that if and when they do need healthcare, they will either go without (potentially dire consequences for themselves and their families) or they will seek care at charity hospitals where the cost of treating the uninsured can run into the hundreds of millions of dollars.  Getting people – who would otherwise be uninsured – into a health insurance system means that they are less likely to fall through the healthcare cracks and more likely to receive care when needed.

Providing health insurance – and genuine access to healthcare – for the hundreds of thousands of people in Colorado who are currently uninsured is not going to be cheap or easy.  But it’s a laudable goal, and one that we should be working towards rather than arguing against.  It’s true that there are financial barriers, but we can work to come up with additional revenue and/or find ways to be more efficient with the state’s Medicaid funds.  One way or the other, we cannot simply let impoverished adults  fall by the wayside simply because they don’t have children.

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