Trump’s win opens the door for Medicaid alternative in Georgia

So certain were Georgia politicos of a Hillary Clinton presidency that 2017 was to be the year state legislators considered expanding Medicaid, after four years of pooh-poohing the idea. Donald Trump’s victory ended that .

Still, no one really thinks the status quo will hold up much longer. If adding hundreds of thousands of Georgians to the state’s already swollen Medicaid rolls would be extremely expensive, doing nothing is costly in a different way. Poor Georgians still get sick, and rural hospitals still lose money on uninsured patients at a rate that forces some of them to close their doors.

“We’ve tried Medicaid expansion” in other states with lackluster results, says Kelly McCutchen, president of the pro-free-market Georgia Public Policy Foundation . “We’ve tried not expanding Medicaid. Neither has really worked. Let’s try something different.”

Even the uninsured consume health care, to the tune of $2,500 per person per year on average. Someone pays for this, whether it’s loss-making hospitals, taxpayers, or those with private insurance paying higher prices. With some 565,000 uninsured Georgians living below the poverty line, McCutchen says, that comes out to $1.4 billion a year.

Yet Medicaid expansion, estimated to cost some $7,300 per new enrollee, would have been triple that amount — a $4 billion answer to a $1.4 billion problem. That wasn’t its only shortcoming: Opinion polls of doctors show a third or more of them won’t take new Medicaid patients, because they lose money on them.

“It was more comprehensive coverage, but what is comprehensive coverage worth if you can’t find a doctor?” McCutchen asks. “It looked good on paper, but it really wasn’t that good in practice.”

So McCutchen devised a different solution. It starts with passing a state law to authorize a practice known as direct primary care. Under this arrangement, McCutchen says, patients pay a flat fee of $40 to $80 per month to a primary-care physician, which affords them a range of benefits. There’s no insurance involved, lowering the overhead cost for the doctor. More than a dozen states currently allow the practice and have lowered their health spending as a result, McCutchen says.

At an annual cost of about $750 per person, Georgia’s low-income, uninsured population could be covered for about $400 million a year. The rest of their current annual health cost of $2,500 — or $1 billion total — could go toward true catastrophic-coverage insurance. Key to the deal, McCutchen says, is that the money for any eligible person who didn’t enroll in these programs would be set aside to reimburse hospitals for treating the uninsured.

“If you funded this fully,” McCutchen says, “you could eliminate uncompensated care, which would save our rural hospitals.”

Ah, but who is “you” here? McCutchen says the $1.4 billion should come from federal tax dollars, for two reasons: First, it’s billions less than Washington would spend if Georgia simply expanded Medicaid. Second, the reason hospitals rack up all this uncompensated care is because of the huge, unfunded federal mandate that they treat anyone who walks in the door.

With Trump winning the election and choosing Georgia’s Tom Price to lead Health and Human Services , there may be a real opportunity for our state to try something creative like this as part of the replacement for Obamacare. It would be a way to improve access to health care while cutting the cost to taxpayers. It certainly looks like the most palatable option yet for Georgia’s legislators.

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About the Author

Kyle Wingfield
Kyle Wingfield
Kyle Wingfield joined the AJC in 2009. He is a native of Dalton and a graduate of the University of Georgia.