Study Shows the Madness of States Refusing to Expand Medicaid

This week, the Robert Wood Johnson Foundation and the Urban Institute released a study showing that the 24 states that have refused to expand their Medicaid programs under the Affordable Care Act will miss out on $423 billion in federal health care dollars through 2022.
Under the law, the federal government picks up all of the costs of the expansion through the first three years, and then its share gradually drops to 90 percent.

At The New Republic, Jonathan Cohn has put together an interactive map that shows how much each state is set to lose. For example, Texas, which leads the nation in its rate of uninsured (at 24 percent in 2012), and has faced draconian cuts to health care spending, will lose almost $66 billion. Florida, tied for the country’s third highest rate of uninsured, will lose a similar amount. Georgia, sixth in uninsured, will lose almost $34 billion, and North Carolina stands to miss out on around $40 billion.
The citizens of these states are paying for the Affordable Care Act — with the wealthiest paying a surcharge on both high incomes and investments. Yet the politicians who represent them are steadfast in their refusal to expand coverage for their constituents.
The economic and human costs of conservatives’ ideological crusade against the Affordable Care Act is difficult to overstate. These states aren’t just rejecting an opportunity to expand coverage; Obamacare assumed that expanding Medicaid would dramatically reduce the number of uninsured patients showing up at emergency rooms for treatment they couldn’t afford, so it cut funding for hospitals that treat large numbers of these patients. Without those federal dollars coming in, a number of hospitals that serve low-income populations in refusing states have already been shuttered. According to the Urban Institute study, “these 24 states are also slated to lose a $167.8 billion (31 percent) boost in Medicaid funding that was originally intended to offset major cuts to their Medicare and Medicaid reimbursement.”
Other studies suggest that refusing to expand Medicaid will drive up premiums for private insurance, and result in somewhere between 5,700 and 17,000 preventable deaths each year in those states that hold out.
What’s more, as we pointed out back in April, an unintended consequence of the Supreme Court’s decision to allow states to opt-out of the expansion is that it’s widening the gap between “red” and “blue” states. It’s long been the case that state budgets reflect very different priorities — blue states tend to spend far more, on average, on health care, education and antipoverty programs than red states — and those differences are becoming sharper at a time when an unprecedented number of statehouses are entirely under the control of one party or another. Federal grants for Medicaid, food stamps and a host of other programs smooth out those differences to a degree. The Medicaid expansion would have done a lot to harmonize health policies for the poor — in many states, single people without children are ineligible for Medicaid no matter how low their incomes — but that divide will only grow wider if those 24 states continue to hold out.
The question is whether they will. Soon after the Supreme Court allowed states to opt out, the conventional wisdom held that with the amounts of money at stake, even the reddest of red states would eventually expand their Medicaid programs. That’s been true in some cases — Arizona Governor Jan Brewer, a stalwart conservative, has been engaged in a vicious fight with members of her own party over the issue — and so far has come out on top. But many of the states that need those federal dollars the most continue to resist.
Forbes reports that “pressure is building on states to go along with the expansion of Medicaid benefits under the Affordable Care Act as new studies and financial reports from health care companies point out stark differences between states treating more poor Americans and those that aren’t.” Hospitals and other providers are lobbying lawmakers hard. But it remains to be seen if those efforts result in common sense prevailing over “small government” ideology.