PA Medicaid Expansion Debate Isn’t About Costs

Tom Corbett says he rejected the Medicaid expansion because he’s just trying to make a fiscally prudent decision for state taxpayers. But that’s pretty obviously not true.

What he really means is that he can’t expand health insurance coverage while holding all his political priors intact.

If this were really a debate about costs, then Tom Corbett would be recommending a single payer system for the state. There’s a hot new study out of UMass that says creating a single state government insurer would save PA residents about $1000 a year on their health care spending, and reduce total spending by about 11%:

Through economies in administration and by reducing inflated prices within health care, the PHCP would produce substantial savings over the current health care system. These economies would allow the PHCP to save over 22 percent of current expenditures while providing the same health services as the current system.

Some of these savings would be used to correct problems within the health care system by extending coverage to the uninsured, raising some provider reimbursements, and removing barriers to access. After these adjustments, health care spending in Pennsylvania would be over 11 percent lower under the PHCP, with savings of over $17 billion or over $1,000 per resident.

Or as a less radical option, Corbett might note that they spend a lot less on health care in Maryland, and propose copying their all-payer rate setting approach.

Now you can certainly raise a number of political objections to these methods. It’s quite true that these are totally untenable ideas if your number one priority is stroking your own conservative superstitions.

But if people were actually interested in the question of what really would work to keep state health care spending affordable both for individuals and for the state budget, then they’d stop fussing around with a multi-payer market and do what every other country with affordable health care does: state price controls.

What’s truly maddening is that when Tom Corbett finally does climb down from his ridiculous position and agree to expand Medicaid, the deal he’s probably going to work out with Kathleen Sebelius will be something like the Arkansas deal, which actually goes out of its way to be more expensive than Medicaid by larding on some extra goodies for health care providers.

This debate is about conservative ideology, it is about interest group politics, it is about many things, but the one thing it definitely is not about is costs.