Medicaid expert: ‘Never been a decision thrust upon the states more consequential’South Dakota’s Medicaid program is extremely well-administered and said the recent audit that found a zero error rate on Medicaid eligibility was “remarkable.”
By: Bob Mercer, Republic Capitol Bureau
PIERRE — A national expert on state Medicaid programs briefed South Dakota legislators Tuesday. Vernon Smith said the decision ultimately is “political” whether to accept the federal government’s offer for expansion of Medicaid to cover adults up to 138 percent of the federal poverty level. An economist, he was the first administrator of Michigan’s system, starting under then-Gov. George Romney, and now is a consultant for the Council of State Governments.
Smith said South Dakota’s Medicaid program is extremely well-administered and said the recent audit that found a zero error rate on Medicaid eligibility was “remarkable.”
“I can’t tell you how rare this is. It just doesn’t happen,” he said. “It’s something to celebrate.”
States split the administrative costs of the expansion with the federal government. Nearly all of the costs for services to the additional enrollees who become eligible under the expansion would be paid by the federal government, with a state’s share gradually increasing to 10 percent in 2020. He expressed confidence that the 10 percent would be permanent. The U.S. cumulative cost for Medicaid starting in 2014 would cost about $6.3 trillion and with the expansion will cost $7.4 trillion.
“Almost all of that is funded by the federal government,” he said. States’ shares of that additional amount would total $76 billion and federal share totals $952 billion.
South Dakota is in the middle of states regarding the percentage of new adults who could enter the Medicaid system at 138 percent, he said.
Other state governments have identified potential savings in their budgets, according to Smith.
He listed Oklahoma at $47 million in savings in other government operations such as prison health; Michigan with potential savings of $100 million to $200 million annually in separate studies by each wing of the Legislature; and Arkansas with potential net savings of $400 million over the long term.
Smith didn’t advocate what position South Dakota’s legislators should take. Republican Gov. Dennis Daugaard opposes the expansion at this time, while Democratic lawmakers have made the expansion their top goal for the 2013 session.
Smith was invited by the Republican and Democratic leaders from each chamber of the Legislature.
He said he began his career assigned to a new federal program as an aide to then-Gov. Romney in Michigan.
“So I’ve worked with Medicaid since ’67. There’s never been a decision thrust upon the states more consequential than this one on expansion,” he said.