Medicaid debate: black, white, red

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Last week, the state’s leading economist waded into the Medicaid debate.

“I think we should seriously think of saying yes to Medicaid,” said Lee Reynis, director of UNM’s Bureau of Business and Economic Research. “It’s an opportunity to develop health-care infrastructure, especially in rural areas. The federal government is willing to pay the freight for much of it.”

BBER’s forecasting models indicate New Mexico would receive $3.9 billion from the federal government from 2014 to 2020, and the expansion would create thousands of new jobs. Reynis was speaking to Economic Forum, a nonpartisan business group. I was surprised at the comment, which came at the end of an otherwise gloomy look at the economy.

Medicaid expansion has become an election issue. The Supreme Court, in upholding the Affordable Care Act, removed the mandate to expand the program, giving states a choice. Expansion supporters and detractors have their boilerplate arguments, so true believers can take a position without thinking.

If you’re in the middle – I’m sorry – you’ll just have to think.

New Mexico, which has upwards of 400,000 uninsured people, could add 170,000 low-income, uninsured people at a cost to the state of up to $500 million between 2014 and 2020. The federal government pays everything for the first three years and 90 percent after that, or $6 billion.

Now look at the up side, the down side, and the unknowns.

Reynis and others see $6 billion as quite an investment in the state. If this were an economic development discussion about whether to spend $500 million to get $6 billion for, say, a military base, the labs, or a plant, I doubt that Economic Development Secretary Jon Barela would predict “a future of rising taxes and stagnating economic growth for the state.”

Is the sky beginning to crack?

An obvious up side is taking care of more people and the savings of treating them outside of emergency rooms before their conditions worsen, which means that the rest of us aren’t paying for their expensive ER visits. Although opponents are waving reports saying Medicaid patients have worse outcomes than insured patients, a recent Harvard study showed that expanded Medicaid in three states reduced the death rate by 6 percent – thousands of lives.

Those percentages have faces and names and loved ones. Suddenly, the waitress can pay her rent AND go to the doctor, not either-or.

Here’s the down side. Even if New Mexico doesn’t expand the program, the state Human Services Department expects 587,103 people will receive Medicaid benefits in 2014 at a cost to the state of $947 million. That number would grow by 2020 to 651,000 people – mostly children, low-income elderly and disabled adults, and pregnant women. The state is already spending nearly one-fifth of its general fund budget on Medicaid.

So when proponents say the federal government absorbs most of the cost, it’s like one of those sales – buy one and get one free. It doesn’t work if you can’t afford to buy one in the first place.

The iffier part is assuming Uncle Sam can hold up his end of the deal. In today’s fiscal climate, we’d be foolish to assume Uncle will be there as he always was.

Earlier this month the activist group Organizers in the Land of Enchantment (OLE) delivered a plate of waffles to the governor to urge her to stop waffling on Medicaid expansion, but she’s not waffling. The administration wants to weigh all the implications.

The battle will first be fought in the Legislature. Even though revenue is up, and there’s new money to spend, we have a lot of catching up to do and a great many other urgent needs. Even the most bleeding-hearted liberals will be torn. We’ll probably see some expansion but not what proponents want and more than opponents think we can bear.