McKenna Needs to Engage In the Debate on Medicaid Expansion

The Seattle Times conducted live chat sessions with both Rob McKenna and Jay Inslee last week.  Health care continued to be one of the headline issues discussed during both sessions.

McKenna addressed the central question of whether he would, as governor, promote the expansion of Medicaid in Washington State.

“I will join the expansion of Medicaid only to the extent that the state can afford it and will not allow the Congress to dictate how much our state spends on Medicaid. Much will depend on whether the feds agree to provide the states with more flexibility in how we run the program.”

This is a reasonable statement for purposes of campaigning.  It appears both to be fiscally cautious while implying an awareness of the needs of lower income Washington families – ie: those that would not qualify for federal subsidies on the Exchange and which would need support from Medicaid to be able to access health insurance services.

However, speaking frankly, that would also be a relatively surface level analysis.

The reality is that McKenna knows how much it will cost the state to be able to cover health care costs for an expanded Medicaid population.  In his first term, the cost to the state would be zero.  Nothing.  Nada.  Free.

The Urban Institute’s recent report on Medicaid in the State of Washington shows that from 2014-2016, the total cost of health care services for newly eligible Medicaid beneficiaries is zero.  From 2017-2019, the cost will grow to $481m over the three year period.  This covers an estimated 350,000 new Medicaid beneficiaries, or about $450 per year per person over that three year period.

If you amortize those costs over the 6-year period during which newly eligible beneficiaries will enjoy coverage, that amounts to about $225 per person per year.

Now, admittedly, there may be some other issues unrelated to health care services.  In Alaska, for instance, the state has cited the cost of replacing an antiquated computer enrollment system, in order to handle the new enrollees, as part of the cost.  Those implementation costs may exist as well in Washington State.

But, the topline costs for covering the cost of care should be pretty straight forward.  Depending on how you look at it, it’s either no-cost to the state for the next Governor’s full term.  Or it’s about $225 per person per year from 2014 – 2019.

The implication that McKenna would want flexibility for the state in Medicaid is an interesting notion – and one many would be eager to hear more about.  There are a number of innovative items states are doing with Medicaid, Oregon being chief among them locally.

However, it’s getting pretty late in the game.  If McKenna would only be willing to expand Medicaid, in part, based on getting increased flexibility from CMS, he owes it to the voters to explain what he would do with that flexibility.

In other words, Mr. Attorney General, what is your vision for health care in Washington State?  Sound bites might get you elected – no fault from me for dealing well there.  But in terms of substantive policy ideas, what do you have in mind when it comes to governing?

Making Medicaid expansion, which costs the state $225 per person per year, contingent on a hypothetical and undefined level of flexibility is not enough to govern on.