Expanding Medicaid in Utah will cost taxpayers millions

Dollars funnelThis is the first of three blog posts discussing the findings of a recent state-funded report on the impacts of Utah’s pending decision on Medicaid expansion.

Some advocates for expanding Medicaid in Utah have recently opined that “there is no mathematical reason not to” expand Medicaid under the provisions of Obamacare. A recent state-funded analysis of Utah’s Medicaid expansion (or not) options shows that this claim is not grounded in reality.

According to the analysis, “expanding Medicaid is modeled to have an overall cost to the state,” which is to say, to Utah taxpayers. If policymakers choose to expand its Medicaid program, the least expensive option is estimated to cost state and county government $246.5 million over ten years, and the most expensive option is estimated to cost $540.8 million over the same period. This is compared with a 10-year cost of $212.6 million for choosing to not expand Medicaid beyond the mandatory changes required under Obamacare, for a net Medicaid expansion cost for Utah taxpayers between $33.9 million to $328.2 million.

It is important to note that these cost estimates assume that the federal government actually provides all of the Medicaid funding that they have promised to states over the 10-year period of the study. Considering the fact that, according to the American Institute of CPAs, the “total obligations of the US government – $61 trillion – exceed the net worth of all of its citizens,” and according to the U.S. Government Accountability Office, “…the current structure of the federal budget is unsustainable,” it seems reasonable to question this assumption.

Some may wish to believe in the fantasy that expanding Medicaid will improve health care for hundreds of thousands of Utahns without costing Utah taxpayers anything. But in the real world you do not get something for nothing. To believe otherwise defies both common sense and human experience. There will be a cost to Utah taxpayers for policymakers choosing to expand Utah’s Medicaid program. And it likely to be significant, running into the hundreds of millions of taxpayer dollars.

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  • Dalene

    yes, I think Swallow should go, but then again I don’t think he should have ever been elected!! But being blind in Utah is the “norm” as long as there is an “R” next to your name!! I kinda would like to see him stay for awhile though, because I don’t think this is the end of the story!! I think these allegation’s go way beyond just Swallow and Shurtlif!! I think anytime a high ranking “R” does anything, the rest of the higher up’s know about it!! So, Mr. Sutherland Institute, what might you be afraid of?? Just asking!!!!

  • Bill Tibbitts

    Before we say “no” to bringing the money we will be taxed to pay for this program back to Utah, we need weigh the benefits of the program– not just the costs.. Buying Apple stock in 1997 cost money. The fact it was not free does not mean it was not a good value.

    If Utah expands Medicaid we will do it better and cheaper than any other state. We will also save lives, reduce the number of people with mental health and substance abuse issues in our jails, and increase the productivity of people who would otherwise either go to work sick or take time off work for conditions that could have been treated.

    • Maggie

      Please tell me the last “good value” the Feds have not run into the ground. Medicare, Social Security ,Education?
      At least this time many of us are saying can we do it better and cheaper, and I believe we can.
      No one I know is denying the fact that we need to care for those in need and even that we need to do a better job but really ,tell me this ,how much longer do you think we can keep borrowing ,no matter how good the cause?
      I did indeed buy a few Apple and Google stocks,but that gain went into the wind with the housing bust and the stock dive. Don’t think for one minute similar events will not have an affect on government programs in the future. We are not as financially secure as a country as we once were .
      For many their hearts are in the right place ,however we have to face reality and do the best we can with the money we have and not count as much on the Feds as we did. That is NOT working out well if you look at the figures.

      • Bill Tibbitts

        Marxists and Libertarians have been predicting the eminent collapse of American capitalism for a long, long, time. Fortunately, we are more resilient than our critics. [Apple stock cost $21.81 in 1997 and is worth $445 now. Google was privately held in 1997. At the time of their IPO in 2004 their stock sold for $85. Today it is selling for $859]

        • Derek H Monson

          Bill,

          I’m not sure how you twist “we are not as financially secure as a country as we once were” into “predicting the eminent collapse of American capitalism”…you’ve taken some unsupported logical leaps with that one.

          To argue that the federal government is not as financially secure as it has been in the past is simply a reasonable analysis of the facts. Many serious fiscal analysts, accountants, and other cool heads have come to that very conclusion. Utah’s own legislative fiscal analysts have recently told policymakers that federal funding to the state is “at risk” and “will diminish as the federal government reduces its deficit in the long run.” The implication is that the federal government is not as financially secure as it has been in the past…exactly Maggie’s point.

          And what happens if/when federal deficit reduction efforts hit federal funding for state Medicaid programs, which seems as likely as not? Utah taxpayers are left to foot the bill, and the cost of Medicaid expansion goes even higher.

          Derek H Monson

          • Bill Tibbitts

            The sequester cuts are already impacting other programs for low income people, but not Medicaid. One reason for this is that people in Congress assume that some of the existing programs will be less necessary after Medicaid is expanded. As more and more states opt into the Medicaid expansion it is likely that Congress will make deeper cuts to programs that they feel are less needed than before. This means that states that don’t opt into the Medicaid expansion will be taxed to pay for expanding Medicaid in other states while seeing other federal funds cut.

            My comments about American capitalism had more to do with the claim that Apple and Google’s stock prices had blown away in the wind. That is simply not true.

        • Utahlady

          Well I am not a Marxist or a Libertarian but I am one concerned American. You look a bit young to be to have lost much when stocks dived, but perhaps you should be concerned re any children you have or will have, and the future you can provide for them. From all I hear the next fall will be education loans and of course health care.
          When the stocks dived, including Apple and Google ,much of my and many others hard earned and saved retirement went into the wind. It is then difficult to get in on the return of those stocks. Thus your analogy of the gains in these stock were not something we were able to partake of. Perhaps you can learn from what those of us went through previously rather than look down your nose at us because we did, and are still trying to be and teach independence.
          What is up with you folks who want to be European like. Do you have loved ones in countries who are struggling and have been for years? What do you find attractive about that?
          Why would your goal be to imitate the failing of other countries rather than use the American ability to overcome as a standard. Roll up your sleeves and help do it right. Be a beacon to follow not a rock to stumble over.
          Utah has a good model and some excellent ideas and caring people , turn them loose and work beside them ,they care to get it right. Look at their track record and financial accomplishments.
          I came from what is a failed state to Utah to live. There are many failed states right here in this country for you to enjoy if failure is what your goal is. You do not have to go far.

    • Derek H Monson

      Bill,

      The point of value is a good one…and Medicaid is not the best value. Financially speaking, charitably provided health care is a far better value than Medicaid, largely because there are few to no labor costs.

      Similar to what you say, by building upon and expanding Utah’s network of charitable health clinics and hospitals we can save lives, reduce the number of people with mental health and substance abuse issues in our jails, and increase the productivity of people who would otherwise either go to work sick or take time off work for conditions that could have been treated. And we can do it for far less cost than Medicaid can hope to achieve.

      Derek Monson

      • Bill Tibbitts

        Do you know how much it would cost to build and maintain a charitable infrastructure big enough to meet all of that unmet need? Who would pay for it?

        Most importantly, there are far too many fairly basic services that will never be available at charity clinics.

        • RD Hunt

          According to the report, expanding medicaid would reduce the uncompensated care/charitable care costs by around $810 million dollars. That is one good sized chunk of savings.

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