For some reason or another, there always seems to be a
lot of misinformation swirling around when it comes to Medicaid. At CCF, we received a flurry of calls
about how health reform’s Medicaid provisions would impact state budgets. One call came from WAMU (local public radio station) reporter Rebecca Blatt who was trying to explain to her listeners why Maryland
was estimating that health reform would save the state money while its
neighboring state of Virginia estimated that it would cost the state more
money.
Here’s Rebecca’s report:
States are releasing their estimates of how much the new
federal health care law will cost them. Virginia says it will amount to about
$1 billion dollars over the next decade or so, but Maryland says the law will
save it about $1 billion.
The key to the difference is the fact that Maryland
already offers relatively generous benefits, while Virginia does not. For
instance, to the tune of approximately $100 million a year, Maryland subsidizes
insurance for high-risk people. John Colmers, Maryland’s Secretary for Health
and Mental Hygiene, says that will change.
“We will not have to do that when the insurance
rules are rewritten to eliminate pre-existing condition restrictions,”
says Colmers.
There will be some cost to the new federal law. But
Colmers says reductions in other services will more than make up for it in
Maryland.
Not so in Virginia. Medicaid, the health insurance
program for the poor, will be the Commonwealth’s biggest expense. Virginia will
have to cover many people who already would be covered in Maryland.
Joan Alker, co-executive director of Georgetown
University’s Center for Children and Families, says there are upsides to that.
The federal government will pay for almost all the expansion.
“So for a state like Virginia, that has not been as
generous as a state like Maryland in its coverage, they’ll actually get more
federal dollars and benefit more from the reform bill,” says Alker.
But they’ll also have to pay more. That’s why the new law
may cost Virginia money and save it for Maryland at the same time.
(*Editor’s Note: Health reform may benefit states far more than any of the early estimates predict — particularly for those states that got out in front on covering uninsured residents.)
You can listen to the report on WAMU’s website.
How is this issue being discussed in your states?