As I've written before, the biggest issue in the gubernatorial campaign—the one that will have the most impact most immediately on the most people—is Medicaid expansion. At stake is health insurance coverage for nearly 350,000 low-income Washingtonians.
Democrat Jay Inslee favors participating in the Medicaid expansion provisions of Obamacare, saying it will save the state hundreds of millions of dollars. Republican Rob McKenna appears to oppose Medicaid expansion, claiming it would be too costly and would drive people out of the private insurance market. Well, they can't both be right, so let's look at the numbers.
Under the Medicaid expansion provision about 261,000 Washingtonians would become newly eligible for Medicaid. Rather than the usual 50-50 federal-state split, the federal government would pick up 100 percent of the cost through the first three years, gradually decreasing to 90 percent by 2020.
That's a pretty good deal; 261,000 more Washingtonians would receive health insurance, but Washington taxpayers would pick up only 1.5 percent of the cost over the first seven years, and only ten percent thereafter. That's hundreds of millions of dollars we won't have to pay through taxes or cost-shifting, while expanding access to hundreds of thousands of our neighbors. Who could be opposed to that?
But wait, McKenna warns. What about the 82,000 Washingtonians who are already eligible for Medicaid, but currently not enrolled? The state would have to pick up 50 percent of the cost of their coverage, an expense, he says, that we simply cannot afford. Judging from his answers during debates, that appears to be McKenna's main objection to Medicaid expansion. (I'd love to discuss it with him in wonky detail, but we're not on speaking terms.)
But once again, McKenna's math is flawed, because the bulk of these 82,000 Medicaid eligible Washingtonians are going to enroll in Medicaid anyway once the personal mandate and other provisions of Obamacare go into effect in 2014. This "Welcome Mat Effect" will be seen with or without Medicaid expansion, and state coffers will be forced to absorb the cost regardless.
However, if we opt into Medicaid expansion, these costs will be more than offset by shifting tens of thousands of Basic Health, Apple Health, and Disability Lifeline enrollees onto Medicaid, mostly at federal expense. Altogether, the Washington State Budget & Policy Center estimates that full expansion will save Washington taxpayers $200 million during the first two years, decreasing to $120 million over the first seven. But that only counts expenditures:
The overall savings to the state will likely be even greater as the ripple effects of covering more people are seen throughout the health care system- such as less emergency room visits and better prevention as a result of increased access to chemical dependency and mental health treatment.
The only thing Rob McKenna won in his partisan attorneys general lawsuit was the right for states to opt out of the Medicaid expansion provisions of Obamacare, and he appears to have every intent to do so. It's not sound fiscal policy that drives McKenna's opposition to Medicaid expansion, but stubbornness or vindictiveness or ideology. And if elected, McKenna could carry through on his threat with the stroke of his veto pen, with little likelihood of enough Republicans crossing the aisle to override it.
Both candidates promise to do a lot of things during their first term of office, but this is one of the few pieces of their respective agendas that is entirely within their control, and that has a measurable impact on our people and our state budget. Inslee promises to opt in to Medicaid expansion, while McKenna argues for opting out. A lot of lives and a lot dollars hang in the balance.