Sebelius: GOP governors will eventually expand Medicaid
Aside from cost savings, Medicaid expansion could create more jobs, given hospitals are often the largest employers in a community, the Health and Human Services secretary told USA TODAY.
by Kelly Kennedy
March 21, 2013
Source: USA Today
WASHINGTON — Republican governors and GOP-controlled legislatures will eventually decide to expand Medicaid in their states because the financial benefits are too big to ignore, Health and Human Services Secretary Kathleen Sebelius said in an interview Thursday with USA TODAY.
"It not only would bring more people into the health care system, but it would dramatically reduce unpaid medical costs," Sebelius said in a wide-ranging interview on the third anniversary of the 2010 health care law, also known as the Affordable Care Act.
Sebelius, a former governor of Kansas, said governors are talking with hospital and patients groups within their states and beginning to understand the economic advantages of Medicaid expansion. Not only would more people have basic coverage, but the number of unpaid hospitalizations would be dramatically reduced, Sebelius said. She cited research that shows the average American pays an extra $1,000 a year in insurance premiums to cover costs of the uninsured at hospitals.
And, she said, hospitals are often the largest employers in a community, so Medicaid expansion could mean the creation of more jobs.
Republican governors in states such as Arizona, Florida and New Jersey have said they endorse Medicaid expansion as research has shown the financial advantages and polls show greater public support. So far, eight Republicans have said they support expanding Medicaid in their states, while 17 have declined and five are still considering it.
Opponents, such as Gov. Rick Perry of Texas and Scott Walker of Wisconsin, say expanding Medicaid would cost too much money and create a culture of dependency on the government.
A study released Thursday by the conservative National Center for Policy Analysis found that Florida taxpayers, patients and hospital budgets would benefit if moderate-income families enroll in private coverage rather than Medicaid. Health care providers would be paid less, the researchers said, and the demand for health services would be too high.
The center promotes private alternatives to government regulation.
A Georgetown University study had previously found that Florida Medicaid expansion would save the state $300 million in 2014, and a study for the Florida Hospital Association predicted 56,000 new jobs because of expansion. Florida's Republican Gov. Rick Scott said the state would participate. However, it remains stalled in Florida's Legislature.
Sebelius seemed positive as she talked about the other benefits of the law, even as critics hosted press conferences denouncing it and the House, for the 36th time, voted to repeal it Thursday.
"All of what we've been talking about would go," Sebelius said of the vote. "They would keep the savings (of the law), but they would repeal all of the operating tools that would get us to those savings."
Among savings seen so far, she said:
- More than 6.3 million people have saved more than $6.1 billion on prescription drugs as the law tries to close the Medicare Part D coverage gap.
- For the first time in 50 years, Medicare costs are going down, and Medicaid costs decreased from last year to this year.
- Hospital readmission rates have gone down.
- And state officials have stopped double-digit health insurance premium increases.
"It's a demonstration of what the president has said all along — that you can decrease costs while improving care," Sebelius said, adding that both the Congressional Budget Office and independent actuary reports have shown that. "It's very clear that some of the statutes in the Affordable Care Act are helping in lowering costs in overall health spending."
In response to concerns about small-business owners either decreasing employees' hours because they can't pay for health insurance, Sebelius said Massachusetts officials heard the same thing before they implemented their health care law in 2006. Now more Massachusetts small businesses provide insurance than before the law.
"We're talking about a marketplace that was pretty broken," she said, adding that small businesses had to pay higher prices for the same products big businesses received for less because they did not have the same bargaining power. "We were on a downward death spiral on the small-business market. What I hear over and over is that they want to provide coverage."
Insurance is important for recruiting and retaining employees, she said. Before the law, 10% of small businesses provided insurance to their employees.
Sebelius said HHS is developing payment reforms and prevention reforms through more innovative programs. "We actually can implement that system-wide without congressional approval," she said. "We fully intend to accelerate that pace."
Sebelius said she expects the law to reduce costs more than initial estimates showed.
"I think we're going to see more as we move forward," she said. "I think we are already seeing some pretty interesting moves in the private sector."
For example, the rule that requires insurers to spend 80% of customers' premiums on health care costs, as well as the statute that requires rate review for double-digit premium increases, has helped keep costs in check, she said. Some companies asked for rate increases as high as 20%, even as increases in health care costs have slowed.
"Lots of states didn't do that at all before," Sebelius said. "States have really increased their oversight over the insurance industry. That has been a nice counterbalance to the year-in, year-out increases in rates."
Some people will pay higher premiums, Sebelius said, because the law calls for a basic package of benefits that will include more than some people have now.
"But I think their out-of-pocket costs will go down substantially," she said, adding that they won't have to worry about bankruptcy-causing medical bills that come when people don't understand what's in their policies.
In October, HHS and the states will begin enrolling people in the health care exchanges, a process that will begin at the healthcare.gov website, which also features explanations and updates. On Oct. 1, even those with pre-existing conditions or those who had been turned away in the past will be able to enroll.
"I think that, for a lot of people, it's a brand-new day," she said.