Results don’t lie; Medicaid expansion benefits Kentucky

Emily Whalen Parento
Emily Whalen Parento

On Dec. 30, Gov. Matt Bevin repeatedly and, in his own words, intentionally, used the word “lie” to describe the representations of the administration of former Gov. Steve Beshear regarding the economic impact of Medicaid expansion in Kentucky.

Bevin should tread carefully. It is no small matter to impugn the integrity of current and former state government officials, as well as an internationally respected firm such as Deloitte Consulting.

Moreover, his comments reflect either a grave misunderstanding or a deliberate misrepresentation of even rudimentary economics, about which no serious person can disagree.

It is a simple fact that Medicaid expansion is an enormous economic win for Kentucky and every other state that has chosen to participate — and basic math explains why.

For the past two years (2014-2015), Kentucky paid nothing and received an infusion of more than $3 billion into its economy in the form of payments to Kentucky health-care providers. Going forward, Kentucky will pay a small fraction of the overall cost of expansion, and never more than 10 cents for every 90 cents that will come into the state.

Kentucky is literally investing a dime to receive nearly a dollar.

The result? Increased tax revenues, increased job creation, and overall increased economic activity, to the tune of nearly $1 billion net benefit through 2021. The only reasonable questions that can be raised are about the magnitude of the positive impact of expansion on Kentucky’s economy, not whether the beneficial effects exist.

Being a successful businessman, Bevin likely knows this, which is perhaps why he has backpedaled on his initial campaign promises to immediately terminate Medicaid expansion.

Every health stakeholder in the commonwealth has benefited from expansion, and it would be political suicide to terminate the program and cut off the flow of federal dollars into our state, not to mention that hundreds of thousands of our fellow Kentuckians would abruptly lose the coverage on which they have begun to rely.

As to Bevin’s plan to apply for a waiver to administer Medicaid in a manner similar to the so-called “Indiana model,” only time will tell whether Indiana has designed a plan that will actually lead to reductions in the health-care cost trajectory or improvements in health outcomes.

However, existing research demonstrates the likelihood that Indiana program elements requiring Medicaid members to have “skin in the game” (premiums, suspensions of coverage for failure to meet certain conditions) will result in decreased access to care.

There is a strong case to be made that improved health outcomes are far more likely when there is broad access to preventive care — which is the result under Medicaid expansion as it has been administered in Kentucky thus far.

And we are beginning to see results.

As Beshear’s final kyhealthnow report demonstrated, Kentucky has made significant progress on a number of key metrics, particularly a reduction in uninsured individuals. And in multiple newly released health rankings, Kentucky is finally beginning to move up from its perennial spot at the bottom of the heap.

Reasonable people can disagree on many things, but whether Medicaid expansion provides a net benefit is not one of them.

Indeed, this is why many Republican-led states across the country are already participating (Arizona, Indiana, Ohio) or actively trying to participate (Alabama, Tennessee) in Medicaid expansion, either in its traditional form or via a waiver.

Bevin should admit that his opposition to Medicaid expansion is entirely ideological, made possible only by willful blindness to the laws of economics. Because the numbers don’t lie.

Emily Whelan Parento, former executive director of Kentucky’s Office of Health Policy, is the Gordon D. Schaber Health Law Scholar at the University of the Pacific McGeorge School of Law in Sacramento, Calif.

At issue: Dec. 30 Herald-Leader article, “Governor Matt Bevin targets Medicaid overhaul plan for 2017”