Mocha: Medicaid expansion opt-out hurts businesses
BY LARRY MOCHA
Saturday, March 09, 2013
3/09/13 at 4:25 AM
Last year the U.S. Supreme Court surprised everyone by upholding the president's health-care reform law, the Affordable Care Act, while giving individual states the ability to opt out of one of its key components, namely, the expansion of Medicaid to provide health insurance protection for people earning less than 133 percent of the federal poverty level.
In Oklahoma, Gov. Mary Fallin, with the concurrence of other elected leaders in the Legislature, decided that Oklahoma would not accept this expansion as it would, in her judgment, be too costly for the state.
Much has been written about that decision and the pros and cons of accepting Medicaid expansion, but what is being overlooked in this debate is the bind that many of our employers will find themselves in because of this decision. Employers in low-wage industries such as hospitality and retail will be particularly hard hit.
Currently, without the expansion, employers with more than 50 employees in Oklahoma will be required to pay for health insurance for those employees making between 100 percent and 133 percent of the poverty level, - employees who would have been covered by the expansion - or face stiff penalties.
Either way, it is an increase in the cost of doing business which is a de facto tax increase on business. This is exactly what the New Mexico Human Services director said in recommending to their governor that she accept federal dollars (which she ultimately did).
This new tax on businesses comes on top of years of rising costs for workers' health insurance. From 1999 to 2010, the cost of employer contributions for both single coverage and family coverage has more than doubled, while the cost of employees' contributions has nearly tripled.
Many sources have shown that the actual costs to the state of expanding coverage to low-wage workers are minimal. In fact, jobs will be created from the billions of dollars coming into the state and Oklahoma will save money on current medical costs. If costs are minimal, employers have even more reasons to favor expansion. Health coverage for more workers will mean a healthier, more productive workforce, which in turn will mean more economic growth.
Not accepting federal funds means that Oklahomans' tax dollars will go to support the health care of workers in other states across the country.
Our state leaders are committed to crafting an "Oklahoma Plan" to deal with the uninsured and the rising costs of health care. I think I can speak for most employers in our state in saying that we want to work with the governor and our legislators to do just that.
However, we believe accepting billions of federal dollars over the next seven years gives our state leaders the flexibility to develop such a plan and fund its implementation.
We already have the first elements of an Oklahoma plan. We know we need to improve the coordination of care at all levels; we must invest in significant technology infrastructure to support this coordination of care and avoid costly mistakes that information sharing would eliminate; we must work with our state medical schools and hospitals to produce more doctors, particularly primary care doctors (we are 49th per capita in the number of primary care doctors, who are the front line in preventive care), and we need to create a culture of personal responsibility.
It is not too late to reverse Oklahoma's decision. Florida, Ohio, Arizona, Arkansas and New Mexico, in addition to others, have reconsidered and reversed their decision, and are now accepting the federal dollars.
By accepting federal funding for the Oklahoma plan, we can invest in all of these things to make Oklahomans healthier and our economy stronger. Otherwise, we will see the health of our employees fall further behind that of workers in other states, hurting our competitiveness and our companies even further.
Original Print Headline: Medicaid expansion opt-out hurts businesses
Larry Mocha is president and CEO of APSCO, Inc.
Larry Mocha: We will see the health of our employees fall further behind.