New Rand study says states that won’t accept Affordable Care Act funding will loose billions

BY RAMONA DU HOUX

June 4th, 2013 

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Close to 70,000 Mainers would be covered with the Affordable Care Act. If Maine doesn't accept the funding the state will loose millions

“The studies have been done, the reports are clear, Expanding health care for Maine people is the right thing to do for our budget and our people,” said Senate President Justin Alfond.

A new report from the non-partisan Rand Corporation said states that refuse the funds risked losing billions. The Rand Study analyzed the impact of 14 states not expanding, including Maine. It concluded that in terms of coverage, cost, and federal payments, states would do best to expand Medicaid. The study found in those states refusing federal dollars 3.6 million fewer people would be insured, federal transfer payments to those states could fall by $8.4 billion, and state spending on uncompensated care could increase by $1 billion in 2016, compared to what would be expected if all states participated in the expansion.

“This non-partisan study sounds the alarm” said Speaker of the House Mark Eves. “Significant dollars are stake and tens of thousands of lives are on the line. We can’t afford not to accept these funds.”

The federal government has offered Maine a bargain with the ACA. It has already pledged to pay 100 percent of the costs of health care for three years. Over time, that share will decline until it reaches 90 percent in 2020 and future years. In Maine, tens of thousands of adults without children would gain Medicaid coverage if the state opts to expand, according to the Legislature’s nonpartisan Office of Fiscal and Program Review. If the state chooses not to expand, about 25,000 childless adults and parents would lose their Medicaid coverage on Jan. 1, 2014.

The Rand study published in the Health Affairs periodical predicts states that don’t expand Medicaid will face higher spending on programs that provide money to hospitals for treating uninsured people because federal spending will decline in this area.

According to an article on the study in the Huffington Post , Rand Corp. experts Carter Price and Christine Eibner of the Rand Corp. wrote, “State policymakers should be aware that if they do not expand Medicaid, fewer people will have health insurance, and state and local governments will have to bear higher costs for uncompensated care. We estimated states’ costs for expansion to be less than the reduction in their costs for uncompensated care.”

The Maine House on Monday passed LD 1066, a compromise measure to accept federal health care dollars to cover nearly 70,000 Maine people.

Democrats modified the original measure to include an opt-out provision if the federal government dropped below its unprecedented match rate. Five Republicans joined Democrats to move the bill forward.

The Senate is expected to take up the bill on Wednesday.