Monday, November 12, 2012

Medicaid solution for State Finances

As I am stuck doing all too often these days, I was reviewing some segments of PPACA for clients. An idea struck me on how to solve State spending and budget issues. Now that 1 in 5 people are covered by Medicaid, States are going to be forced to spend more of their limited finances on this healthcare plan.

According to Kaiser State Health Facts Ohio spent around $6,116 per Medicaid Enrollee in 2009.

Drop Medicaid. Before anyone screams how unfair and cruel that is I'm not saying leave them without coverage, Obama said PPACA will make HealthCare affordable, so take him up on it.

"The Premium Credit" is available to people with incomes up to 400% of the Federal Poverty Level (FPL). For 1, 2, or 3 person households that is $44,680, $60,520, and $76,360 respectively. They would be required to pay between 2% and 9.5% of their income. Using 400% FPL and 9.5% maximum sharing cost the individuals would be responsible for;

#     Max Cost      Current OH Cost          Savings to the State
1 = $4,244.60      $6,116.00                            $1,871.40
2 = $5,749.40      $12,232.00                          $6,482.60
3 = $7,254.20      $18,348.00                          $11,093.80

The State could turn around and give vouchers to the residents to cover their liability under the exchange. It would cost the resident nothing. The resident would have considerably better coverage than Medicaid. The State would save billions. Doctors and Hospitals would be reimbursed at Private Insurance rates instead of Medicaid rates. There is enough savings left over they could even give employers $2,000 tax credits to offset their penalties, assuming anyone even employs more then 50 people come 1/1/2014.

Everyone is a winner...well except the Federal Government, but they'll just print more money anyways so it doesn't really even affect them.
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