Guest Column: Expanding Medicaid will be a cost-effective reform

Sometimes more is less and better too. That's true for the expansion of Medicaid contained in the health care reform bill that just passed the U.S. House.

As lawmakers sought to cut the bill's price tag, the Congressional Budget Office noted that making more people eligible for Medicaid is less costly than other ways of insuring lower-income Americans. What the CBO didn't say is the medical coverage they get will be more comprehensive and affordable.

The historic nature of passing a sweeping reform bill overshadowed what would be the largest expansion of Medicaid since it was created more than four decades ago. The House legislation would cover everyone up to 150 percent of the federal poverty line, or $16,245 for an individual, including low-income single adults and couples without children who now don't generally qualify for Medicaid. Those changes would extend Medicaid coverage to at least 15 million more Americans.

The impetus for expanding Medicaid was to offset the cost of a more expensive version of the public option. A 2008 study in the journal Health Affairs found that it would cost about 26 percent more to cover an uninsured adult with private insurance than with Medicaid.

But there's more to the cost-saving story. Even generous private health insurance plans usually require deductibles, copays and coinsurance that can be prohibitive for those with very low incomes. According to the Health Affairs study, out-of-pocket expenses are seven times higher under private insurance than under Medicaid. For those with low incomes, those additional costs can be the difference between getting needed medical care and going without.

Beyond reducing financial barriers to care, Medicaid also provides more comprehensive services that are tailored to meet the needs of low-income beneficiaries. Unique services are available to address transportation and language needs. And systems are in place to provide care and case management and assistance with critical social services.

Recent trends point to other good signs for taxpayers and beneficiaries. Many of the newly covered Medicaid beneficiaries will almost certainly be covered by Medicaid managed-care plans, which offer networks of primary care and specialty providers that also promote wellness and ensure that preventive services are available. These health plans are increasingly popular, covering 56 percent of all Medicaid beneficiaries, or 21 million people.

Expanding Medicaid will aid those who need help the most with more appropriate services and at costs levels that will not keep them from getting care. Low-income Americans often work in jobs without health benefits or they can't afford coverage. Without access to medical care, they are more likely to have health problems that, left unaddressed, raise costs later as conditions worsen.

Yes, because states now pay part of the cost of Medicaid, governors are concerned about any new costs. But that's why the House would have the federal government pick up all or nearly all of the cost for covering the new beneficiaries.

Helping more Americans through a program with a track record of success makes sense. Medicaid works. States know how to administer it. Medicaid coverage makes a real difference in the lives of the 47 million people it already serves.

Expanding Medicaid to 133 percent of the poverty line, as the Senate bill does, would be a giant step forward. But the House's expansion to 150 percent is a move where more is better and cost-effective too.

It's the best example of what President Obama meant when he said health care reform must "build on what works." Enlarging this proven program is the most straight-forward way to cover a large number of today's low-income uninsured and make sure they can get quality care they can afford. The Senate should now follow the House's lead and put Medicaid to work for more of the neediest Americans.

The writer is the CEO of the Association for Community Affiliated Plans and a member of the Maryland Community Health Resources Commission. She lives in Davidsonville.