The economic stimulus of Obamacare | Arkansas Blog

Sunday, May 7, 2017

The economic stimulus of Obamacare

Posted By on Sun, May 7, 2017 at 8:24 AM

HEALTH EQUALS JOBS: That was the argument back when Arkansas first embarked on the private option Medicaid expansion. - KUAR
  • KUAR
  • HEALTH EQUALS JOBS: That was the argument back when Arkansas first embarked on the private option Medicaid expansion.

The New York Times devotes front-page space
to the obvious today: Ending Obamacare not only could cost lives and good health for many Americans it could damage the economy.

The outsize economic role of the American health care industry heightens the risks posed by the Republicans’ effort in Washington to repeal the Affordable Care Act, enacted in 2010 under President Barack Obama, and it comes at a delicate moment for the broader economy.

While the government reported Friday that unemployment was at its lowest point in more than a decade, the health care industry has been an engine for much of that hiring, adding jobs at more than three times the rate of the rest of the economy since 2007.Nor is the growth limited to hospitals. With help from the vast expansion of Medicaid enrollment that began three years ago, nursing homes, outpatient centers and medical labs have also grown, turning a fragmented industry into a strong political force.

Do you think it is coincidental that Arkansas unemployment has been at historic lows for months? Coincidental that the four years of expanded Medicaid health coverage in Arkansas have been attended by government ability to cut a half-billion dollars in taxes? Our early adoption of the Medicaid expansion has been an enormous economic stimulus to the state of Arkansas.

So, while poor, old and sick Arkansans look on nervously as the Republican Congress decides how much damage is to be done to Obamacare, the state already has taken a big step toward a self-inflicted economic wound with Gov. Asa Hutchinson's legislation to throw 60,000 lower income workers off the program and perhaps discourage more with new work and cost requirements.

Hutchinson has said those 60,000 will just jump right over to the federal marketplace for equivalent cost and coverage, fully paid by the federal government. Even if Congress does NOT change Obamacare, nobody really believes this.  Poor workers won't be able to afford the premiums, however small.

One estimate I saw said we'd be lucky if a quarter of the 60,000 stayed insured.

The cost of the Private Option/Arkansas Works/Obamacare Medicaid expansion is in the neighborhood of about $6,000 per person per year.

At that rate, $60 million in health care spending will be lost for every 10,000 Arkansans that no longer ha d health insurance coverage thanks to the new state law. That's $360 million worth of health spending for the whole batch.

Every dollar that stops flowing is a dollar that won't go to an insurance company, a hospital, a doctor, a nurse's aide, a home health aide, a pharmacist and so on. That, in turn, means less income for the state in income tax and sales taxes on goods and services those people purchase. Plus, hospitals will see a  rise in costs of uncompensated care for emergency treatment.

Interesting times ahead. Something tells me that the $105 million tapped from cigarette lawsuit money that was supposed to go only for health under an initiated act won't sit untouched long in the state reserve fund to which it was recently transferred. I hope, at least, that it does go to health care. And, not say, for another state handout to a big steelmaker or similar holding us hostage with threats to move to Texas.

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