Reeves strengthens case for Medicaid

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As Mississippi's House and Senate try to forge a compromise on Medicaid expansion that could get enough legislative support to override an expected gubernatorial veto, one of the biggest sticking points is how far the expansion should go.

The House wants to go as far as the federal government will allow and mostly pay for – somewhere between 200,000 and 300,000 individuals.

The Senate is looking at a more modest expansion, between 40,000 and 80,000, which would most likely forgo all of the generous financial incentives that Washington is offering to states that expand.

The main argument for the Senate's plan is the hesitation to move about 150,000 individuals off of private insurance onto Medicaid, which would be one of the outcomes of full-blown expansion. Insurance Commissioner Mike Chaney has expressed the same reservation.

On the face of it, their concern makes sense. Private insurance usually covers more of the actual cost of care than does government insurance, so it's better for providers, such as the hospitals that are supposed to be among the main beneficiaries of Medicaid expansion.

But as Mississippi Today reports, the argument is simplistic and outdated.

First, the simplistic side. The private insurance the working poor get on the federally subsidized "exchanges," which were created by the Affordable Care Act, tends to be catastrophic coverage. It may protect an individual from being bankrupted by a health crisis, but it comes with high deductibles that the individual may not be able to cover when he or she does get care. Hospitals and other providers can try to pursue payment through collection agencies or legal means, but often those efforts are unsuccessful and the portion of the patient's bill that's not covered by insurance gets written off as bad debt. With Medicaid, there are no deductibles, so providers don't have to chase after money they are unlikely to collect.

Second, the outdated side. Until recently, it was true that hospitals got significantly less from their Medicaid patients than they did from those on Medicare or private insurance. That changed, though, through the efforts of Gov. Tate Reeves, a steadfast Medicaid expansion opponent. When his administration successfully pursued federal approval for enhancing the Medicaid supplement payments that hospitals receive, it dramatically reduced the reimbursement gap by about $700 million a year statewide. As a result, a hospital today may make more money on a patient insured with Medicaid than one on the exchange.

Unwittingly, Reeves has increased the economic rationale for fullblown Medicaid expansion and weakened the logic for the Senate's resistance to it.

There are, of course, other points of disagreement, such as the Senate's insistence that the working poor prove that they are, in fact, working. But even there, that idea sounds better in theory than it results in practice. The one state that is still trying to tie a work requirement to Medicaid expansion, Georgia, has shown that the monitoring is mostly just enriching the consultants.

When weighing the pros and cons of Medicaid expansion (and there is admittedly going to be some of both), it is important to deal with the question honestly. That means looking at what's likely, not what's remotely possible. And it means dealing with the reimbursement situation as it exists today, not what it was as little as six months ago.

If the question is approached in that way, then full-blown expansion not only helps the most people but it may make the most financial sense, too.