Mississippi Candidates Offer Different Medicaid Expansion Ideas

TUPELO --After years of consistent resistance to the idea by the state's Republican leadership, elections have reopened the debate around Medicaid expansion.

The Affordable Care Act, commonly called Obamacare, allows states to expand eligibility for Medicaid, with federal funds covering a large share of the expansions costs. Mississippi has not accepted the expansion.

Democratic gubernatorial candidates, however, are openly campaigning on the idea of expanding Medicaid rolls, and even some Republican candidates are toying with versions of the idea.

Republican gubernatorial hopefuls Bill Waller and Robert Foster say they want Medicaid "reform" -- a modified version of expansion, with certain work requirements or income-based requirements to pay premiums.

Lt. Gov. Tate Reeves has promised that, if elected governor, he'll continue to fight any expansion of Medicaid.

In the lieutenant governor's race, Republican Delbert Hosemann has also discussed the idea.

As this debate continues in Mississippi, neighboring states Louisiana and Arkansas have been living with the benefits and the burdens of expanded health coverage.

Louisiana accepted the full version of Medicaid expansion in 2016, while Arkansas offered a modified version of expansion in 2014 after receiving a waiver to do so by the federal government.

The Arkansas plan has been cited by Republican candidates as a potential model to follow, alongside Indiana's expansion under then-Gov. Mike Pence.

In 2010, Mississippi, Arkansas and Louisiana had matching rates of uninsured adults. Among those adults age 19 to 64, 26 percent of the population had no health insurance.

Arkansas and Louisiana, both of which have expanded Medicaid coverage since 2010, still have matching rates of uninsured adults -- 12 percent. Mississippi's adult uninsured rate has improved but has plateaued at 18 percent.

"It's not free; there is a cost," said Louisiana State University economist Jim Richardson, who with his colleagues published an in-depth analysis on the economic impact of Medicaid expansion in the state. "In most cases, Medicaid expansion comes out in favor of the states."

For fiscal year 2017, Arkansas contributed $70.6 million to cover nearly 327,000 in the expansion population; the federal portion was $1.8 billion. Louisiana paid $99.6 million to cover 445,000; the federal match was $2.8 billion.

In Arkansas, a legislative task force appointed by the governor found that discontinuing the expansion would cost the state more money, said Dr. Joe Thompson, president of the Arkansas Center for Health Improvement. Because the federal government reimburses states at a lower rate for traditional Medicaid, the state would have to come up with more matching funds to cover groups like poor pregnant women.

"The state would have a budget hole to fill," Thompson said.

Rural hospitals in Louisiana and Arkansas are steadier as a group than those in Mississippi.

Mississippi has seen five rural hospitals close since 2010. Arkansas has lost one. Louisiana none. Reports filed with the Centers for Medicare and Medicaid in October 2018 showed that 61 percent of Mississippi rural hospitals were operating on negative margins, compared with 39 percent of Louisiana's rural hospitals and 51 percent of Arkansas' rural hospitals.

"It does take pressure off hospitals," Richardson said. "It has been a success story from that angle."

Private option

Arkansas expanded coverage in 2014 under the Affordable Care Act, and it has to be renewed annually by 75 percent majorities in the state House and Senate.

Arkansas currently uses a private option where the state Medicaid program purchases insurance plans for people who fall under 138 percent of the federal poverty level, about $28,600 for a family of three. Federal matching funds will pay 93 percent of the costs of the expansion population for fiscal year 2019 and are set at 90 percent starting in 2020.

Those who fall under 100 percent of the poverty level, about $20,800 for a family of three, don't have copays or deductibles. Those above the federal poverty level are responsible for premiums that are capped at 2 percent of income and cost-sharing capped at 5 percent of family income.

"It's really created access to care," said Brad Parsons, chief executive officer and administrator for Baptist Memorial Hospital-Northeast Arkansas in Jonesboro.

Baptist-Northeast Arkansas saw its uncompensated care drop from 7 percent in 2013 to 2.5 percent in 2018.

"It really helped bolster hospitals, especially rural hospitals," Parsons said. "The smaller, more rural the hospital, the more impact it has had."

Previously uninsured patients would often wait until they were very sick and seek care from emergency departments, which are the most expensive place to get care, Parsons said. Now they can access primary care providers, which is not only less expensive, but more effective in helping people manage and prevent illness.

"This is an important piece if we want to reduce (health care) costs in the long run," Parsons said.

The private option has proven more expensive than other Medicaid expansion models, and Arkansas is the only state currently using this model. However, the private option has allowed Arkansas to realize secondary goals beyond decreasing the number of uninsured, Thompson said.

Arkansas has seen an increase in the number of insurers offering plans on the exchange, Thompson said. Arkansas has the sixth lowest marketplace benchmark premium in the United States.

"We've increased competition and stabilized the risk pool," Thompson said.

The competition has benefited those who buy insurance elsewhere, Thompson said. Premiums for employer-based insurance were the second lowest in the country for both individuals and family plans in 2017.

The legislature implemented work requirements in 2018, but they were struck down in federal court.

Opting in

Louisiana expanded by covering people who fell under 138 percent of the poverty level under its existing Medicaid program in 2016.

"These are people who are the working poor," said Tiffany Netters, executive director of 504 Healthnet, a network of 27 health care organizations in the New Orleans area that provide care regardless of patients' ability to pay. "They don't make enough to pay for insurance on their own."

Having Medicaid has opened access to care, especially for breast and colon cancer screenings, said Netters, whose organization was a part of a larger coalition that advocated for Medicaid expansion.

"We do think we'll be seeing improved outcomes in the next few years, specifically with cancer" Netters said. "We should be catching more people before they get to stage IV."

There have been bumps in Louisiana's expansion. Many private providers are still electing not to accept Medicaid or limiting the number of new Medicaid patients, Netters said. There continues to be a need for education in terms of the mechanics of accessing the system and health literacy, Netters said. The national and state debates over Medicaid can be confusing

"People are fearful," Netters said. "They'll ask 'Do I still have benefits?'"

Although the primary purpose of expansion is to reduce the number of uninsured, the state has seen economic benefits from the infusion of new federal funding, Richardson said. In the LSU analysis, which was commissioned by the Louisiana Health Department, the researchers looked at fiscal year 2017, when the federal match averaged 97.5 percent of the expansion costs.

After adjusting for adults who previously would have been covered in traditional Medicaid, the researchers found that the net new federal funding of $1.8 billion supported nearly 19,200 jobs, state tax revenue of $103 million and local tax revenue of $74.6 million. The analysis found that the state tax revenue exceeded the funds allocated for the expansion by $50 million.

In the short term, the employment gains have been especially important as the oil and gas sector have seen downsizing, the report stated. In the longer term, Louisiana should benefit from having a healthier workforce as the population ages, Richardson said.

As Mississippi debates possible expansion, Richardson said it's important to look beyond the state budget when assessing the benefits and cost.

"The burden on the state becomes a little bit larger," as the federal match moves toward 90 percent in 2020, Richardson said. "You have to do the math."

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