What does the future hold for Medicaid?

By Steve Wilson
March 19, 2019

The leader of Mississippi’s Medicaid program warned taxpayers Monday that the long-term health of the program is in jeopardy absent reform.

Drew Snyder is the Executive Director of the state Division of Medicaid and he told the Stennis Capitol Press Forum that the national program is unsustainable long term unless “we continue to refine our approach.”

He also cited data from the federal Centers for Medicare and Medicaid Services that says if nothing is done by 2026, one of every five dollars spent in this country will be on health care.

One of the reasons for these increasing costs is that 36 states have expanded Medicaid under the Affordable Care Act. Since the ACA dictates that the federal government cover 90 percent of the costs for expanding eligibility to all individuals earning less than 138 percent of the federal poverty level, the impact to the program’s bottom line is worsening.

Medicaid costs for expansion adults only, according to the CMM, were expected to be $855 billion in new federal spending between 2017 and 2026. That would add up to more than 10,000 F-35 fighter aircraft ($85 million flyaway cost).

Expanding Medicaid eligibility in Mississippi has become a campaign issue in the gubernatorial race, as Lt. Gov. Tate Reeves opposes it and all of the Democratic contenders, including Attorney General Jim Hood, support expansion.

One problem is that Medicaid expansion will cost state taxpayers more than expected. The state Institutes for Higher Education did a study in 2015 that said that it’d cost the state $159.1 million per year by 2025 if 95 percent of the eligible population participated in the expansion (310,039 enrollees).

“A number of states that expanded Medicaid have all made estimates and they’ve all been wrong,” Snyder said. “Louisiana was more than expected. Virginia had more enroll than expected. The numbers vary pretty significantly.”

According to a report by the Louisiana-based Pelican Institute, the state expected 306,000 new enrollees when it expanded Medicaid eligibility, but that number has ballooned to 502,647 according to recent data from the Louisiana Department of Health.

Right now, the federal government pays 76.6 percent of most medical costs and anywhere from 50 to 90 percent of administrative costs. In Mississippi, the program covers 674,000 enrollees, with 56 percent of them children and less than 10 percent of them able-bodied adults. Medicaid covers costs on 67 percent of all births in the state.

Under Synder’s leadership, the agency won’t ask for a deficit appropriation from the legislature for the first time in three years and overall state spending on Medicaid is down 9.4 percent less than it was three years ago.

In fiscal 2016, the state spent more than a billion dollars on Medicaid. This fiscal year, which starts July 1, the agency asked for an appropriation of more than $938 million.

Synder says that one reason for that is decreased enrollment in the program due to an improved economy. He said his division has also eliminated non-critical conducts, come up with a more precise budgets, provided better oversight over vendors and aggressively sought to cut excess spending in the program, including decreasing the division’s workforce by four percent.


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