In 2014, the Gap Will Widen between the Health and Mental Health "Haves" and "Have Nots"

Let’s open 2014 with four health policy predictions.  Here are the first three:

• Obamacare enrollments will top 5 million.
• Uninsured rates will come down.
• Health inflation will tick up.

Here’s why you can count on these.  

First, 1.1 million people have already enrolled in Obamacare.  The Administration hopes for 7 million by March.  That may be optimistic, but there will be another burst of enrollments in a couple of months.  And there will be another open enrollment period toward the end of the year. 

So at least 5 million enrollments seems reasonable.  And here is a bonus prediction.  If that many sign up, the politics of Obamacare in the half of the states that have embraced it will probably shift during the 2014 election cycle.  Their people will, too.

Second, the number of people who are uninsured will go down.  A 1 or 2 percent decline will be attributable to Obamacare.  The improving economy will also help.  And this means that the numbers will be better even in the states that did not embrace Obamacare.

Third, because more people will be insured and getting care, health inflation will go up again.  Both the Congressional Budget Office and the Administration have been predicting this for 2014 ever since the passage of Obamacare. 

In fact, if it doesn’t happen, this will probably be the health policy news story of the year.

But the fourth prediction may be most significant of all.  The gap will widen between the states with better health and mental health care and those with worse. 

And this has everything to do with Medicaid money.

As of December, the states were literally divided down the middle between those that decided to expand Medicaid in 2014 and those that did not.  If you compare the 26 states (including the District of Columbia) that decided to expand Medicaid to the 25 states that did not, the expanding states already have a decided advantage in supporting health and mental health care.

And with hundreds of billions more dollars flowing into those states over the next few years, that gap will probably widen.

Consider how these Medicaid dollars could widen the gap in just two areas – the number of nationally-ranked hospital specialty programs in a state and mental health spending. 

First, think about the high-quality hospital specialty services we all want and sometimes need.  Hospitals rely on Medicaid dollars for a significant portion of their revenue.

Medicaid-expanding states already have significantly more nationally-ranked hospitals and specialty programs, according to the U.S. News and World Report 2013-2014 rankings, than states that do not.

Seven of the ten states with the greatest numbers of nationally-ranked specialty programs decided to expand Medicaid.  And consider the advantage already enjoyed by California (ranked #1 in number of nationally-ranked specialty programs) and New York (#3) over the two most-populated states that decided not to expand Medicaid – Texas (#6 in number of nationally-ranked specialty programs) and Florida (#11).

California and New York, with 678 hospitals between them, are home to a total of 28 hospitals with at least one nationally-ranked specialty, with a total of 154 nationally-ranked specialties overall.

Texas and Florida, with 895 hospitals between them, are home to a total of 16 hospitals with at least one nationally-ranked specialty, with a total of 70 nationally-ranked specialties overall.

Texas and Florida are leaving as much as $100 billion on the table over the next ten years, much of which would have ended up on hospitals’ bottom lines.

The same point can be made regarding funding for care for people with mental illnesses – on whose behalf many of those Medicaid expansion dollars will be spent. 

The 26 states expanding Medicaid already spend much more on mental health services than those are not.  And the disparity is striking.  According to the Kaiser Family Foundation, the average state spends $120 per capita on mental health agency programs. 

But the states expanding Medicaid spend $139, on average, compared to $116 by states that refused.

And even these spending numbers look artificially close because of high per capita mental health spending in states like Alaska and Maine, which have small populations.  When population size is taken into consideration, as is clear from the pie chart above, the expanding states account for nearly twice as much of the nation’s per capita mental health spending as do the non-expanding states. 

And that gap – like the gap between the “haves” and “have nots” – will only widen in 2014.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/