Opting Out of Medicaid Expansion Will Cost States Billions, Study Says
States that have decided not to expand their Medicaid programs under the Affordable Care Act will miss out on billions of dollars in federal funding over the next decade, according to a new study released Thursday by the Commonwealth Fund, USA Today reports (Kennedy, USA Today, 12/5).
Under the Medicaid expansion in the ACA, U.S. residents with incomes up to 138% of the federal poverty level are eligible for the program. However, the Supreme Court last year ruled that states could opt out of the expansion. For states that opt in, the federal government will cover 100% of the cost of the expansion until 2016, after which the federal share will decline gradually until it reaches 90% in 2020 (California Healthline, 12/4).
The study used data from the Urban Institute projecting Medicaid enrollment and spending under the ACA in 2022 to calculate the net costs to states refusing the Medicaid expansion.
Overall, the study found that opting out of the expansion would result in state residents missing out on health care benefits, as well as an economic loss to states. Specifically, the amount of federal funding states not participating in the Medicaid expansion would miss out on totals:
- $9.2 billion in Texas;
- $5 billion in Florida;
- $2.9 billion in Georgia;
- $2.8 billion in Virginia (Commins, HealthLeaders Media, 12/5);
- More than $2 billion in Missouri and North Carolina; and
- More than $1 billion in Louisiana, Oklahoma and Wisconsin.
Tennessee and Indiana, both of which that have not formally decided on whether to expand their Medicaid programs, would miss out on more than $2 billion each if they decide to opt out (Wilson, "GovBeat," Washington Post, 12/6).
Further, the report concluded that no state that opts out of the Medicaid expansion would save money.
Meanwhile, taxpayers in states that opt out still will pay for Medicaid expansion efforts in other states without experiencing any of the benefits. For example, the extra federal money spent on Medicaid goes directly to local health care providers, such as hospitals or physicians, and helps the overall state economy, according to Sherry Glied, dean of New York University's Wagner Graduate School of Public Service and one of the study's authors (USA Today, 12/5).
"There are no states where the taxpayers would actually gain by not expanding Medicaid," Glied said, adding, "Nobody wins" (USA Today, 12/5).
Sara Collins, vice president for health care at the Commonwealth Fund, said she expects that all states eventually will participate in the Medicaid expansion. She added, "Over time, states are going to look at the costs both in terms of lost health insurance coverage for residents but also the significant economic impact on their states and on their safety net hospitals, [which] will continue to have to serve people who are uninsured even though there is federal funding available for them" (HealthLeaders Media, 12/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.