Carmela Coyle: Why Medicaid Matters

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By: Carmela Coyle

The first 100 days for a newly elected politician is a milestone of sorts, a period where dramatic change can be effected and the tone can be set for a new administration.

Gov. Larry Hogan didn’t wait that long. In his first 10 days, Gov. Hogan's budget proposes significant changes to rein in spending.

Over the past few weeks, individuals and organizations have pored over the details, trying to figure out just how the governor’s tighter budget will affect them. Local governments and educators are concerned, as are advocates of other worthwhile causes, like transportation and open space programs.

To be sure, the governor’s proposal will touch every sector of Maryland’s economy, and health care, which accounts for one-sixth of that economy, is no exception. Hospitals, among the state’s largest private employers with more than 100,000 employees, are the key component.

In his proposal, Gov. Hogan is looking to cut state spending for Medicaid — the program that provides health care to people with very low incomes — by $200 million, which requires a much larger cut of $500 million in order to net the state number. The loss of those dollars has a very real impact on the nearly 1.2 million Medicaid enrollees in Maryland, as well as on the doctors, nursing homes, pharmacies and hospitals that care for them.

First, some facts about Maryland’s Medicaid program:

  • * Medicaid provides three types of critical health protection: insurance for low-income families, children, the elderly and people with disabilities; long-term care and services for older adults and people with disabilities; and supplemental coverage for low-income Medicare beneficiaries
  • * Maryland's current Medicaid program costs $9 billion
  • * About 60 percent of that $9 billion comes from federal funds; the rest from the state
  • * Medicaid spending has grown because the number of people eligible has grown — the Affordable Care Act’s health care coverage expansion allows certain uninsured people to sign up for Medicaid
  • * The federal government now covers 100 percent of the costs for people added to Medicaid’s rolls under the Affordable Care Act, and gradually drops to 90 percent over the next five years; in other words, the ACA expansion has a limited impact on the state’s budget

A government’s budget is the most explicit expression of the values of those we elect to represent us. Here, in Gov. Hogan’s proposal, he has followed through on his promise to curb the state’s structural deficit problem.

Maryland’s hospitals are, in fact, already part of the solution — holding costs below the rate of overall spending growth in the governor's budget. Which is why we need an open discussion of how Medicaid cuts affect the ability of hospitals and other health care providers to help stimulate Maryland's economy and how those cuts mean fewer dollars for the care that is going to be demanded by a growing Medicaid population.  Of course, there are other ripple effects, such as:

  • * slower health care sector job growth and the attendant tax revenue that goes with it
  • * fewer doctors who will accept Medicaid patients, driving people to higher-cost health care settings
  • * less investment in health care technology and the community businesses that support health care

There’s a business case that caring for the women, men and children through Medicaid is a valuable investment of state resources, with a return in the form of lower health care costs for all down the line. But there’s a far stronger impetus for why we choose to put these dollars in this particular bucket: the 1.2 million Marylanders who rely on Medicaid are Maryland’s most vulnerable. President Lyndon B. Johnson captured it best when he signed the Medicare bill 50 years ago:

“Many men can make many proposals. Many men can draft many laws. But few have the piercing and humane eye which can see beyond the words to the people that they touch. Few can see past the speeches and the political battles to the doctor over there that is tending the infirm, and to the hospital that is receiving those in anguish, or feel in their heart painful wrath at the injustice which denies the miracle of healing to the old and to the poor. And fewer still have the courage to stake reputation, and position, and the effort of a lifetime upon such a cause when there are so few that share it.”

Everyone will contribute to reducing state spending. But our elected officials should carefully protect what we spend on Medicaid because it is necessary and good for the health care needs of the people it serves, as well as the state’s overall economy.

Carmela Coyle
CEO and President
Maryland Hospital Association

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