One-Year Value of Adding One Person to Medicaid = $2,800.00, Max.
I am worth it. Are you?
A probably overworked saying has it that elections have consequences. No-one but lawyers and Judges seems to have noticed that rulings have consequences, too.
By a vote of 7 to 2, the U.S. Supreme Court recently decided to invalidate compulsory Medicaid Expansion under the Affordable Care Act. The end result is to put a price tag of $2,800 to add one person for one year to Medicaid.
This is not to say that hard rulings make bad consequences. Or that if hard rulings do make bad consequences, that the bad consequences should trump the law. It is to say that they should be a factor in the calculus of ruling.
The four joint dissenters on the Supreme Court chose language that clearly expresses disagreement with, even disdain for, considering the practical effects on real people of their theoretical ruling on abstract issues.
The effect of the Supreme Court's ruling is to make Medicaid Expansion voluntary. Four States have already announced their joint position that they will not join this 'expansion of Federal power' despite financing by the Federal Government beginning at 100% in 2014 and narrowing to a low of 90% in 2020: Texas, Florida, Louisiana, and South Carolina. Some or all of them also express fear that the Federal Government's percentage of Medicaid might be taken away somehow. It is unclear how many States will decline to participate.
The Congressional Budget Office estimates that 3 Million fewer people will be insured by Medicaid over the next 10 years than the CBO estimated before the Supreme Court decision. The CBO further estimates that this will result in a reduced cost to the Federal Government of $84 Billion over the next 10 years. Robert Pear, "Court's Ruling May Blunt Reach of the Health Law" (New York Times Online, July 24, 2012). This reduced cost comes to an estimated $28,000 per uninsured person over the next 10 years, or $2,800.00 to add one person to Medicaid for one year. See id. It does not include an estimate of the cost to these uninsured persons. Of these estimated 3 Million more uninsured persons, at least 30,000 will die earlier than anyone has a right to expect.
Three States voluntarily expanded Medicaid availability, even before the ACA was enacted: New York, Maine, and Arizona. Based on data reported from these 3 States, experienced medical researchers have reported in the New England Journal of Medicine that the expansion of Medicaid in these 3 States has saved an estimated 1,500 lives per year. See Benjamin Sommers, M.D., PhD, Katherine Baicker, PhD & Arnold Epstein, M.D., "Mortality and Access to Care Among Adults After State Medicaid Expansions" (published Online by the New England Journal of Medicine on July 25, 2012). See also Pam Belluck, "Medicaid Expansion May Lower Death Rates, Study Says" (New York Times Online, July 25, 2012).
Couple these findings together with the CBO's estimated savings of $84 Billion to the Federal Government over the next 10 years as a result of States declining to participate after the Supreme Court's decision making the Medicare Expansion voluntary. The CBO's estimate is based on 1/3 of the Medicaid-eligible population living in States that will fully participate in the Medicaid Expansion; 1/2 of that population living in States that will fund only a part of the Medicaid Expansion, and 1/6 who live in States that will not participate in the Medicaid Expansion at all.
These figures lead to a calculated estimate of 15,000 lives in 3 States saved over the course of 10 years. Assuming -- low -- that these 3 States represent the entire 1/3 of the Medicaid-eligible population, thus the remaining 2/3 of the population or 30,000 lives lost over 10 years represent the savings to the Federal Government of $84 Billion.
To recap, the Supreme Court's 7 to 2 vote to make the Medicaid Expansion voluntary, has already led to some States announcing that they will not opt in. The cost of these decisions to add one of 3 Million who will not otherwise be eligible for Medicaid, is $2,800.00. The cost to be paid by 30,000 of the 3 Million uninsured will be greater.
To say again, this is not to say that hard rulings make bad consequences. Or that if hard rulings do make bad consequences, that the bad consequences should trump the law. It is to say that they should be a factor in the calculus of ruling.
One further cost and one savings to note, unrelated to the Supreme Court and its decision. These costs and savings are the most recent estimates reportedly available from the Congressional Budget Office. If the Affordable Care Act is repealed, repeal of the ACA will add $109 Billion or $109,000,000,000.00 to the deficit. If the ACA is left alone, the ACA will reduce the deficit. Unfortunately, the CBO's estimates of the amount of the deficit reduction are not available for all of the ACA provisions except Medicare, apparently, or at least they are not reported. "Savings in Medicare alone are expected to total roughly $700 billion in the coming decade." Robert Pear, "Court's Ruling May Blunt Reach of the Health Law" (New York Times Online, July 24, 2012). [Emphasis added.]
The author is Co-Chair of the Health, Life and Disability Insurance Law Subcommittee of the American Bar Association's Insurance Coverage Litigation Committee.
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