A report prepared for the Iowa Hospital Association, paid for by the American Hospital Association and performed by Regional Economic Models, Inc., and George Washington University, indicates that if Iowa expands Medicaid to those at 138 percent of the federal poverty level, over 2,000 jobs could be created and $2.2 billion in economic activity could be brought into the state over the next seven years.
The American Hospital Association spent $19 million to lobby for the “Affordable” Care Act in 2011, according a Feb. 28 article written by Dr. Sreedhar Potarazu for Fox News.
“The purpose of this report is to offer a balanced and comprehensive view of the economic, employment and budgetary effects of the decision of whether or not to expand Medicaid in Iowa,” the report reads. “It is important to note that this report focuses on the effects of Iowa’s decision concerning the Medicaid expansion alone; it does not address the impact of the overall federal health law.”
Iowa shares the expense of providing Medicaid coverage with the federal government. Today, Iowa is responsible for 40.4 percent of most Medicaid spending in the state, and the federal government covers the remaining percentage. The ACA increased the federal matching rates for persons who are newly eligible through the Medicaid expansions, which is expected to reduce state costs for this population.
From 2014-16, the federal government has promised to fund 100 percent of spending for this population. The report estimates this to be $4.1 billion.
This enhanced federal match declines to 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and 90 percent in 2020 and thereafter.
The report quotes figures from the Urban Institute regarding the number of people who may join Medicaid in Iowa, if the program is expanded. The institute originates from a blue-ribbon commission created by President Lyndon Johnson in 1968. Johnson was the President who originally signed Medicare and Medicaid into law.
The report says that the Institute indicates that implementation of the Medicaid expansion will increase the number of people in Iowa covered by Medicaid by 72,000 people by 2022.
The Urban Institute projects that an additional 43,000 people who are eligible under today’s eligibility rules but not currently enrolled will subsequently sign up due to the publicity and outreach related to health reform, even without a Medicaid expansion. Iowa will have to pay the regular matching rate (currently 40.4 percent) for any Medicaid-covered services obtained by these individuals.
If Iowa does not expand Medicaid to 138 percent of poverty, some residents with incomes between 100 and 138 percent of poverty may instead get health insurance through the Health Insurance Exchange. These individuals likely will be fewer in number than those who enroll in Medicaid because the exchanges will require greater contributions from recipients to enroll and to receive health care. Our analyses account for the fact that some in the 100 to 138 percent of poverty bracket will instead enroll in Health Insurance Exchanges if Medicaid is not expanded.
The report says that additional spending made necessary by Medicaid expansion will lead to more jobs. Not all of these jobs will be in the health care sector. Some will be in other areas through a broader, “multiplying effect” from increased taxpayer expenditures through Medicaid.
The Iowa Hospital Association is backing the expansion of Medicaid, though hard figures and the actual impact an expansion will have on the state, are still unavailable. Below is a question and answer exchange between the Journal-Express and IHA Spokesman Scott McIntyre.
• If we expand Medicaid and medical facilities no longer have “eat” as much in uncompensated care, will the charges for everyone go down?
That’s impossible to say as each hospital would be affected differently. Furthermore, the details of Medicaid expansion (as it would work in Iowa) are still being ironed out, so the impact is difficult to predict. However, in the long run, it’s much more likely that overall health care costs in Iowa would be less with expansion than without it.
• If Medicaid is so great, why do so many doctors currently refuse to see Medicaid patients?
Medicaid is widely accepted in Iowa, primarily because many of our physicians are hospital employed.
• How will your payment system be set up and/or affected if the federal government fails to live up to its promises?
That would depend on the extent of the failure and how the state responds to it. However, the revenue stream for Medicaid expansion is firmly in place under the taxing and fee-collection provisions of the Affordable Care Act and IHA is confident the federal government will maintain the Medicaid program, just as it has for the last several decades.
• How can thousands of jobs created from increased dependency on the government in an industry saddled with so many regulations that have traditionally driven up costs?
With more than $2 billion in new dollars coming to the state and thousands of Iowans gaining greater access to the health care system, the need for additional manpower (both in health care and in businesses that support it) seems apparent.
• How many of those jobs will actual be health care providers, and not merely additional employees hired to handle additional paperwork and requirements from the Medicaid expansion?
We do not have that data, but with many formerly uninsured Iowans having greater access to services, we believe the need for additional providers (as well as jobs created indirectly) will be significant.
• Of the medical provider jobs that would come from expansion, how many would reach rural areas of Iowa?
Again, the data we have only looks at the impact on a statewide basis and is not broken down by urban/rural.
• The Wall Street Journal indicated this week that, if states accept Medicaid expansion, it may be difficult for them to opt out of the program. Has the IHA considered the possibility of this happening and its possible effects?
We believe that opting out is protected under the terms of the Affordable Care Act. Further, the Supreme Court’s decision that led to expansion being made optional severed any link between expansion and any existing Medicaid program, so that a choice to opt out would not affect the existing program.
• Iowa has traditionally received low reimbursement rates for government-paid patients. Is there a guarantee that Iowa's hospitals and health care providers would be paid what they deserve for treating underprivileged patients?
Low reimbursement rates from these programs remains an issue and IHA continues to advocate for a fairer, value-driven system (and we believe we are making progress). Nonetheless, it is better for both providers and patients that low-income Iowans have Medicaid coverage than remain uninsured.
• Are there any other points you would like to make regarding the IHA's support of Medicaid expansion that you want to be sure our readers are aware of?
Not at this time.