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Kaiser study on health care costs

As we know, state officials from HHSC Commissioner Tom Suehs up through Governor Perry have been claiming that the Affordable Care Act will cost the state of Texas a lot more than the CBO estimates. There’s quite a bit of evidence to suggest that the state is wrong on this point, and more more of it has come from the Kaiser Commission on Medicaid and the Uninsured, which released a study that you can see here suggesting that Texas will be a big winner under the ACA. The Trib summarizes:

Health care reform expands Medicaid access to nearly all individuals with incomes up to 133 percent of the federal poverty line (about $29,000 for a family of four). The Kaiser study estimates that Texas’ population of uninsured adults will drop between 49 and 74 percent by 2019, depending on how aggressive the state is with its outreach. That means state Medicaid rolls will grow by between 1.4 million and 2 million people.

The financial burden will largely be borne by the federal government, the Kaiser study reports, covering more than 95 percent of Texas’ costs. If Texas sees a 46 percent increase in Medicaid enrollment by 2019, the study notes, it will still only see state Medicaid spending grow by 3 percent. If it sees a more aggressive 64 percent increase in Medicaid enrollment, state spending will rise by 5 percent. That’s a state cost, between 2014 and 2019, of anywhere between $2.6 billion and $4.5 billion, the report says — far below Texas’ $25 billion estimate.

“There will be large increases in coverage and federal funding in exchange for a small increase in state spending,” the report notes. “States with low coverage levels and high uninsured rates will see the largest increases in coverage and federal funding.”

In other words, Texas’ historic parsimony will result in a huge influx of federal dollars for Medicaid coverage. Somewhere, the god of karma is laughing his ass off.

Naturally, state officials, whose political livelihood depends on a depiction of the ACA as a tax-raising monster, refuse to see the upside.

A spokeswoman for the Texas Health and Human Services Commission says the state has examined the Kaiser study on adult Medicaid expansion under the federal health law “and found that our basic assumptions are very close.”

State spokeswoman Stephanie Goodman complained, though, that the study — sponsored by the Kaiser Commission on Medicaid and the Uninsured — left out higher state administrative costs and the state’s costs of maintaining rate hikes for the primary care docs that are federally paid just for two years, 2013 and 2014.

“We just think they erred in leaving those very real costs out,” Goodman said.

Kaiser Commission president Diane Rowland, though, responded that Texas has omitted from its cost estimates the lowered state and local costs of paying for uncompensated care.

“If that uncompensated care burden goes away and is replaced with individuals who carry insurance coverage, it really has a large offset to the cost of implementing the Medicaid expansion,” Rowland said.

Goodman replied, “We recognize that there will be local savings, but it’s unclear how that will factor into the state budget. … Those costs are primarily paid by local governments right now.”

Hey, you know what? Taxpayers fund local governments, too, so if state costs go up but local costs go down, that has a very real positive effect. As for Goodman’s protest that people won’t be able to find doctors who will accept Medicaid, there are plenty of things that the state can do about that, such as fast-tracking more internationally-trained physicians and giving more empowerment to nurse practitioners, both of which will incidentally lower the cost of primary care overall. There’s an awful lot of win here if the state would only be willing to grab it. The Washington Post has more.

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