FRANKFORT, Ky. — Gov. Steve
Beshear's decision to expand Kentucky's Medicaid program will cost
taxpayers more than $1.1 billion by 2021 according to a new state study
released Thursday.
But the study also says Kentucky's next
governor should be able to find money to pay for that because the
explosion of new health care spending caused by the expansion will
generate $1.7 billion in savings and new revenue for the state over the
same time period.
The study estimated the state's total net savings from 2014 to 2021 to be $819 million.
"Today
we remove the final reason Kentucky critics have for not supporting the
Affordable Care Act," Beshear said of the $140,000 study conducted by
Deloitte Consulting and the University of Louisville's Urban Studies
Institute. "In conclusive fashion we bury that objection under an
avalanche of facts."
The federal Affordable Care Act required
states to expand Medicaid, the government-funded health insurance
program for the poor and disabled. The U.S. Supreme Court later ruled
states did not have to expand Medicaid, but they could if they wanted
to.
Beshear chose to expand Medicaid over the objections of many
Republican lawmakers, making Kentucky one of two Southern states that
did so. While the federal government promised to pay for 100 percent of
the new Medicaid population for the first three years, conservative
lawmakers warned that the state eventually would incur a heavy cost
beginning in 2017. Kentucky finished its most recent budget year with a
$91 million shortfall.
But the study found as Kentucky added
nearly 400,000 people to its Medicaid rolls in 2014, the federal
government poured nearly $1.2 billion money into Kentucky to pay for
them. That new health care spending added 12,000 new jobs, producing
more consumer spending and tax revenue and adding an extra $37.4 million
to state coffers.
The state also saved money by transferring some
of its health care obligations to the federal government, including
some prison and mental health services. And because more people had
insurance, the state had to pay hospitals less to care for the
uninsured.
The study projects those savings and new revenues to grow every year.
"I
think that this is the earliest glimpse and look back of the first year
(of Medicaid expansion) of any state that we are aware of," said Audrey
Haynes, secretary for the Kentucky Cabinet of Health and Family
Services.
Republicans questioned the study, noting a study the
year before the expansion from PricewaterhouseCoopers projected 206,000
people would be added because of Medicaid expansion, but the actual
number was nearly twice that.
"The initial projections were so far
off of what the population reaction was going to be and the number of
enrollees was going to be, it makes me wonder about this," Senate
President Pro Tem David Givens, R-Greensburg, said.
Beshear
defended both studies, adding that PricewaterhouseCoopers and Deloitte
are both respected independent auditors.
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