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02/07/13 – Medicaid Expansion Will Save Lives and Money

by Ned Calonge, MD, MPH

President and CEO, The Colorado Trust

This editorial originally ran in Health Policy Solutions on February 7, 2013.
Ned Calonge, MD, President & CEO, The Colorado Trust
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As Colorado lawmakers prepare to consider expansion of Medicaid – the publicly-funded health insurance program for low-income individuals – it is important they use an evidence-based approach that considers costs and savings in terms of the health impact on the lives of Coloradans, as well as our state budget.

A July 2012 study, published in the New England Medical Journal, reported a demonstrated reduction in mortality associated with Medicaid expansion in a handful of other states. The study found that for every 100,000 citizens in the population between the ages of 20 and 64, Medicaid expansion saves 19.6 lives every year. Applying this result to our population, we can expect Medicaid expansion to save the lives of at least 629 Coloradans every year. To put this number in perspective, this savings would be greater than the number of Coloradans who die of breast cancer or colon cancer every year. Conversely, this comparison shows us that if we do not expand Medicaid, this limitation would become one of the top 10 causes of death in Colorado.

In terms of financial costs and savings, the Affordable Care Act provides financial incentives for states to expand Medicaid eligibility to the nation's poorest citizens. The federal government will pay all of the costs of the expansion in 2014, 2015 and 2016. After 2016, the law specifies that the federal share will not drop below 90 percent. Expansion would provide coverage to more people between the ages of 19 and 64 who have annual incomes of $15,856 or less, or $32,499 for a household of four.

A new analysis by the Colorado Health Institute (CHI) with support from The Colorado Trust shows expansion would make Medicaid available to an additional 240,000 Coloradans by 2022. The cost to our state over this 10-year period would be just over $1 billion, with the federal government picking up over $11.4 billion of the cost. A separate analysis by the Colorado Department of Health Care Policy and Financing (HCPF) has estimated that expansion will actually save Colorado more than the estimated costs over the next decade.

CHI's analysis also compares their findings on the costs of expansion to analyses that have been conducted by HCPF and the Kaiser Commission on Medicaid and the Uninsured. This comparison indicates only slight differences from these independent analyses of very complex data.

This growing base of evidence underscores the critical importance of this unprecedented opportunity. We can save thousands of lives in our state over the next decade and save money, making state revenue available for other priorities. There will be no such savings of either lives or funds without expansion. For Colorado, Medicaid expansion is truly a moral and ethical issue, as well as a fiscal imperative.

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