Extending Medicaid is an opportunity for New Mexico
Nick Estes | MyView
Posted: Saturday, October 20, 2012 - 10/20/12
Posted: Saturday, October 20, 2012 - 10/20/12
The Santa Fe New Mexican has urged the governor and Legislature in an editorial to take the federal government up on the incredible opportunity to expand Medicaid coverage to 150,000 or more low-income, uninsured New Mexicans under the Affordable Care Act. That editorial is spot-on.
This is an incredible deal for the state. The federal government will pay 100 percent of the costs for the first three years and then phase down the percentage over three years, but never lower than 90 percent.
This summer, Gov. Susana Martinez said she was worried about how much this would cost the state, but it turns out that the deal is even better than she expected. That’s because new state tax revenues generated by the Affordable Care Act will more than cover even the modest state costs. The state’s Insurance Premium Tax will apply when the Medicaid program buys insurance for newly covered individuals. Other state taxes will be generated as these individuals obtain health care and the spending circulates in the rest of the economy. Thousands of new jobs will be created.
The Legislative Finance Committee staff recently concluded that, during the first seven years, the state general fund would actually come out ahead expanding Medicaid — by $341 million. At the same time, we will improve our economy by thousands of jobs and significantly improve the health of 150,000 or more New Mexicans. This is truly a win-win proposition.
After 2019, the state will have to pay 10 percent of the cost for these newly eligible individuals. But new state tax revenues from Medicaid federal funds, plus the federal subsidies to individuals who buy health insurance in the new exchange, should continue to equal or exceed the state’s share of expanding Medicaid.
Cost to the state is simply not a factor in deciding whether to extend Medicaid to some of our most vulnerable citizens.
These individuals are mostly the “working poor” — people who have jobs that don’t provide health insurance. Some of these individuals are uninsured veterans, one-half of whom are counting on getting care through the Affordable Care Act, including the Medicaid expansion, according to a report by the Urban Institute. These folks deserve health coverage.
Perhaps for the first time in their lives, 150,000 of our fellow citizens will be able to get medical care outside the emergency room. They will get regular checkups and preventive services, as well as follow-up care and prescription drugs. Besides, the state and counties pay a lot of these costs already — costs that will be mostly covered by the federal government when we extend Medicaid and implement the rest of the Affordable Care Act. It will also help reduce the “cost shift” onto those who have insurance, which amounts to $2,300 per year per family in New Mexico (the highest rate in the country).
Because “Obamacare” is law, implementing the Medicaid expansion will keep the New Mexico dollars paid in federal taxes in the state, where they will benefit New Mexicans. Many other states will choose to expand Medicaid and will use our tax dollars to do so if we don’t act.
More recently, the governor has asked the federal government if she can delay coverage to some poor New Mexicans or leave them out of the Medicaid expansion altogether and force them into the health insurance exchange, where they would likely not be able to afford coverage. Failing to fully expand Medicaid would not only be fiscally unwise but incredibly unfair to some of our lowest-income neighbors and friends. Leaving them out would leave a huge gap in health insurance coverage in New Mexico and burden emergency rooms again.
We hope that Gov. Martinez and the Legislature will take this opportunity to improve our citizens’ health and our economy at the same time.
Nick Estes is a deputy policy director at New Mexico Voices for Children, a statewide child advocacy organization.
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