The deeper one digs into the dollars in the debate about expanding Medicaid in Georgia, the worse the proponents’ case looks.
Jason Carter, the Democratic nominee for governor, has argued for adding to Medicaid’s rolls based on the 10-year figure of “$30 billion in expansion funds that we’ve paid.” You could be forgiven for thinking Georgians are sending $3 billion a year in some sort of specific, Medicaid-expansion tax to Uncle Sam and getting nothing back for it.
That would be about $300 for every man, woman and child in Georgia, or $1,200 for a family of four. I haven’t noticed my family’s taxes going up by $1,200 this year. Have you?
Of course not, because that’s not how the Medicaid expansion envisioned by Obamacare works.
When the AJC’s PolitiFact Georgia looked at Carter’s claim recently, it found he was overstating his claim. That’s in part because Georgia taxpayers wouldn’t contribute the whole $30 billion, and in part because the money in question comes primarily from general federal revenues.
This is money Georgians are going to pay, and Washington is going to spend, no matter what. If it doesn’t go to Medicaid expansion in Georgia, it will go to something else.
Put another way: If it does go to Medicaid expansion, it'll either stop going to something else or come from somewhere else (think: China).
In a country that continues to borrow $1 out of every $5 or $6 it spends, there’s no such thing as unspoken-for money floating aimlessly from the hinterlands to the capital. Some $650 billion in federal spending this year — about eight times the estimated annual federal cost of expanding Medicaid nationwide — will be borrowed.
While Obamacare does include a smattering of taxes, they amount to only about half the cost of expanding Medicaid nationwide. And that, in turn, is only a portion of the total cost of Obamacare.
Some of the taxes are explicitly tied to other parts of the law, such as subsidies for private insurance purchased on exchanges. Some are borne by specific industries, from pharmaceutical firms to medical-device makers, and will get back to Georgians only indirectly, and unevenly.
The best question isn’t whether we should take this deal that busts budgets for both the feds and the state (whose annual costs could reach some $300 million). Rather, it’s whether there’s a more cost-efficient way to expand health-care access to the working poor. I wrote about one such possibility, “concierge care for the little guy,” last month.
At worst, Washington could offer to fully subsidize private insurance on the exchanges for people in non-expansion states. These are people who currently aren’t eligible for subsidies because they were supposed to be getting Medicaid. (Yes, such an offer should require Congress to change the law, but so did a lot of other changes to Obamacare which the Obama administration made unilaterally. Just call it another “waiver.”)
At an average pre-subsidy premium of less than $4,200 per year, Washington could cover another 600,000 Georgians for $2.5 billion a year. That’s about two-thirds the cost of Medicaid expansion and wouldn’t require any additional state funds. The new enrollees would have to come up with the money for co-pays and deductibles, but that’s a better deal than they’re getting now.
There are no easy answers. But the questions change once you understand we’re not talking about free money.
