New cost estimates just released by the state of Indiana and by a non-partisan health policy organization suggest that health care reform will not have the staggering impact on Indiana that was first suggested, but it will be significant, especially in the face of the state's other fiscal difficulties.
Recall that a few weeks ago, an actuary for the state's Family and Social Services Administration estimated that Indiana could be taking on an additional $3.6 billion in new costs over a 10-year period for Medicaid.
It is an issue fraught with political overtones. Hence, Democrats came out firing, accusing Republican Gov. Mitch Daniels' administration of exaggerating the costs.
They said the $3.6 billion was based on a worst-case scenario — all eligible Hoosiers would sign up — but that in reality, fewer people would enroll for new coverage under Medicaid.
Consequently, the State Budget Committee asked the actuary to come back with new cost estimates based on less than full-participation in Medicaid by newly-eligible Hoosiers.
Federal estimates are that participation would be more like 80 percent, so that is the number the actuary, Milliman, Inc., used the second time.
Last week the actuary came back with a new figure of $2.9 billion over the next decade.
Daniels said the new estimate assumes that "hundreds of thousands of eligible Hoosiers will decide to pay for something they can get for free," reported The Associated Press. He said it would still pose a huge blow to Indiana.
But the state's revised estimate was followed up by a new analysis from the Kaiser Family Foundation's Commission on Medicaid and the Uninsured.
It concluded that the expansion of Medicaid under health reform will significantly increase the number of people covered by the program and markedly reduce the uninsured in states across the country. And, it said the federal government would be picking up the majority of the cost.
But the cost to Indiana would still be significant. The estimate is that the cost could range from $478 million to $899 million from 2014 to 2019.
That is five years, compared to the state's 10-year estimate, and does not include some costs included in the state's figures. The Kaiser figures are based only on the cost of new Medicaid enrollees.
The state actuary figures include the costs of increased reimbursement rates to doctors and other providers who treat Medicaid patients. And, as has been pointed out previously, Indiana will be losing some $298 million in prescription drug rebates that will now be going to the federal government.
So what do we know?
Even if these estimates don't mesh, the cost of bringing previously uninsured Hoosiers into Medicaid under the new health reform program is going to be significant for Indiana taxpayers, who really don't know at this point how they are going to pay for their schools and other necessities a few years down the road — that is, short of a rousing economic recovery.
But also, we know that potentially hundreds of thousands of Indiana residents now without health coverage may, beginning in 2014, have access to medical care previously available to them.
State politicians are taking the point in debating these issues. With a gubernatorial election on tap for 2012,
Hoosiers will likely learn a whole lot more about the impact that Medicaid will have on their lives. Pay close attention.