Medicaid Covers People in a Cost-Efficient Way

3-2-11blogThe new Medicaid program offers Nebraska a way to provide health care to tens of thousands of people in our state who need it most.  Next week, lawmakers will debate LB 577, which would implement the new Medicaid program in Nebraska.

But why Medicaid? Basically, because Medicaid is the most cost-effective means of insuring low-income individuals and families.

We know spending on Medicaid beneficiaries has grown much more slowly than the costs of private insurance. Between 2007 and 2010, the premiums for employer-sponsored insurance increased by 5.5%, whereas the cost of covering someone through Medicaid rose by only 2.5%.

The Congressional Budget Office estimated that, on average, it will cost the federal government $6,000 to insure someone through Medicaid while private insurance premiums will cost $9,000.  That is a 50% increase. Plus, the average cost per Medicaid beneficiary is significantly lower than under private insurance (after adjusting for differences in health status).

Providing health coverage also encourages people to get routine exams and address health issues early, before they become emergencies. We know that when people have Medicaid coverage, they are less likely to delay necessary care, have fewer unpaid bills, and report better health.

Bottom line: the new Medicaid program makes good fiscal sense, and it’s the right thing to do in Nebraska.

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