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Not enough known about Medicaid expansion costs to take risk, says Sandlian Center economist

When it comes to Medicaid expansion, an economist with the Sandlian Center at the Kansas Policy Institute said there is a lot we still don’t know about what it would cost in the long run.

“States can’t seem to figure out how many people can take advantage of the program,” said Michael Austin with the Sandlian Center. “In nearly every state that has expanded, residents cut back hours, they don’t accept pay raises, all so they can fall under those income limits.”

It’s also impossible to know if the reimbursement rate will remain at 90 percent past 2020.

“With the federal government reaching record-setting debt levels, they could make the State of Kansas pay a higher share of the cost if we adopt Medicaid expansion,” said Austin. “In fact, that was a recommendation from President Obama, to blend all those federal discounts, all those federal matching rates for state health care spending, in order to relieve the federal burden.”

It’s also not a certainty that expanding Medicaid will do enough to help rural hospitals stay open.

“Market forces are in play here,” said Austin. “Moody’s Investor Service, they did a survey of rural hospitals in either expansion states or non-expansion states. What they found was that the overall economic environment, or hospitals ability to control their own expenses, that’s the real key here. That’s why hospitals are failing. It’s because of some huge macroeconomic factor.”

In Bourbon County, for example, there has been a loss of population that has contributed to the financial issues with the hospital. Austin said the county has lost 4 percent of its population since 2010. Medicaid expansion doesn’t give money to hospitals for people who no longer live there and are no longer served by those hospitals.

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