Healthcare reform fallout: Which states are the winners?
States' Medicaid programs will have to grow dramatically to meet the demands of healthcare reform. Those states that have already started the process could come out ahead financially.
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For example, since the year 2000, New York state has been providing Medicaid healthcare benefits for childless adults and parents at the federal poverty level ($10,800 for a single adult; $14,570 for two adults). As of February there were 388,000 people in that program.Skip to next paragraph
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Under the healthcare fixes – officially known as the reconciliation bill – the state would see a net gain of $2.1 billion, estimates Rep. Jerrold Nadler (D) of New York.
“The reconciliation bill does give financial benefits for the expansion states,” says Robin Rudowitz, Washington-based associate director of the Kaiser Commission on Medicaid and the Uninsured, part of the Kaiser Family Foundation.
Maine is another state that stands to benefit from the fixes bill. According to Rep. Mike Michaud (D) of Maine, the state, which already insures many childless adults under its Medicaid program, will receive an additional $154 million in federal financing from 2014 to 2019.
In other states, however, the exact value of the benefit – or whether there is a benefit at all – is in doubt because of the complexity of the issue.
Wisconsin, for instance, has only a limited program to cover childless adults under Medicaid.
Buffeted by the economic downturn, the state wanted its Medicaid money to cover as many adults as possible since many had been laid off. But that meant offering each recipient less money than the federal government benchmark for reimbursement. Moreover, the state had so little money to put toward the program – and the need was so great – that the enrollment limit was filled within three months and there is now a waiting list.
With all these variables, how much will the new federal healthcare plan help? “We are in the process of working on the numbers but we are confident they will come out net to the good,” says Karen Timberlake, Secretary of the Department of Health Services in Madison.
Arizona demonstrates how fluid the numbers are. Four Arizona Democrats in Congress say their state will get $2.5 billion in new Medicaid funding under the new plan. But Gov. Jan Brewer, a Republican, estimates it will cost the state $1 billion in both 2012 and 2013.
The discrepancy has its roots in Arizona's decision to expand its Medicaid coverage to poor childless adults in 2000, adding an estimated 310,000 people to its rolls.
Faced with a large budget deficit in recent years, the state tried to cut its Medicaid coverage. But because it previously accepted federal stimulus funds – which included a Medicaid adjustment – it was not permitted to do so. The terms of the new legislation also make backing out difficult, if not impossible: The state cannot cut current services without risking lawsuits.
Governor Brewer's $1 billion estimate is based on the expansion of the program in 2012 and 2013. She calls the healthcare bill “financially devastating” to the state, which proportionately has one of the largest deficits in the nation.
The four Arizona Democrats in Congress, however, have called the governor’s estimates of the added Medicaid costs, “hyperbolic and completely unfounded.”
Healthcare reform fallout:
Part 1: Which states are the winners?