Saying “this decision comes down to what is best for New Mexicans,” Gov. Susana Martinez decided Wednesday (Jan. 9) to accept the federal government’s offer to expand Medicaid across the state in a move that’s estimated to affect 170,000 people in New Mexico.
“We have an obligation to provide an adequate level of basic health care services for those most in need in our state,” Gov. Martinez said in a statement. “However, we also have an obligation to ensure our state’s financial security. In deciding to expand Medicaid, I weighed every possible outcome and impact.”
The decision has been awaited for months, with health care advocates arguing that the federal government’s initial offering to cover 100 percent of the expansion was too good to pass up while opponents argued that the feds have a history of grossly underestimating the costs of large government programs and critics fear the expansion could leave the state government on the hook for millions of dollars down the road.
Martinez acknowledged those concerns, saying, “Unfortunately, we know that out-of-control federal spending can create uncertainty for these kinds of programs. If the federal government breaks its promise and begins to cut their reimbursement rate, we will be forced to scale back this expansion.”
But the decision has been made and many Democrats across the state were delighted.
“I’m really happy it happening,” outgoing state Sen. Dede Feldman (D-Albuquerque) told Capitol Report New Mexico moments after the decision was announced. “I think it’s the best choice for New Mexico medically and morally.”
Across the country, Medicaid has become the fastest-growing portion of state budgets. In the upcoming fiscal year, Medicaid spending in New Mexico is expected to take up $940 million. Only spending on public schools is larger.
A number of states headed by Republican governors have passed on the Medicaid expansion plan that moves from 100 percent payment by the feds in the first three years to 90 percent by 2020. The program goes into effect in 2014.
So far, 10 states have declined the Medicaid expansion offer (Alabama, Georgia, Idaho, Louisiana, Maine, Mississippi, Oklahoma, South Carolina, South Dakota and Texas) and 17 (plus the District of Columbia) have accepted it (counting New Mexico). Last month, another western state headed by a Republican governor — Nevada and Gov. Brian Sandoval — OK’d the expansion.
One of the critics of Medicaid expansion is Dr. Deane Waldman, a pediatric cardiologist, who told Capitol Report New Mexico back in August, “Although it looks on paper like it’s a good deal, it’s a very bad deal.”
Waldman insists the Medicaid expansion will increase government subsidies and decrease patient care.
“Let’s say [the federal government] fulfills their promises, which I have questions about … it’s not free money,” Waldman said. “Where’s it coming from? Ultimately, we have to pay the debt of the money they’re printing … Five years from now [New Mexico] can’t reduce the eligibility requirements. That would be against the law. And if the money’s not there, we, New Mexico, is going to have to pay for it.”
But Feldman counters by saying that expansion “should be good news for New Mexico’s hospitals .. this will help them make up for some of their losses” and that “New Mexico can make adjustments later on.”
“We have so many who are uninsured who show at emergency rooms,” Feldman said. “This will alleviate that somewhat.”
The governor said she spoke US Health and Human Services Department Secretary Kathleen Sebelius earlier today, and said Sebelius ”committed to working with the governor to sign New Mexico’s Centennial Care waiver.”
Centennial Care is a Medicaid modernization plan designed by Human Services Secretary Sidonie Squier that aims to reduce unnecessary spending and coordinating care across the state.
Should the feds renege on their promises, Martinez said in her statement, “we must protect our kids and protect our budget by ensuring that the most recent additions to the Medicaid program are the first ones moved off.”
In the months leading up to the debate, economist Lee Reynis at the University of New Mexico not only said “Medicaid expansion … pretty much pays for itself” but that her modeling predicted that 1,500 new jobs in health care will be created by 2014, 5,000 new jobs will be added by 2020 at that spending by those new workers resulting in additional hiring that she says could lead to 10,000 jobs across the state.
A number of fiscal conservatives have expressed skepticism about those numbers but on Wednesday, Gov. Martinez made her decision.
“I think this is good news for rank and file people of New Mexico,” Feldman said.
****
Update 1/10: Dr. Waldman called us Thursday and elaborated on his criticism:
“This is a very bad deal,” he said, questioning some of the assumptions built into the expansion and the cost of creating the bureaucracy to run it. “And even if they up sign up close to 200,000 people, who the hell is going to take care of them,” Waldman said. “There are no new doctors, no new nurses … Even if they get covered that doesn’t mean they’ll get care.” Waldman also said that he’s seen statistics showing that “31 to 32 percent of doctors can’t afford to take Medicaid. Now it’s only going to get worse.”
(Full disclosure: Dr. Deane Waldman is an adjunct scholar for the Rio Grande Foundation, which funds Capitol Report New Mexico.)
