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Dec. 6, 2013
NEW YORK CITY Kansas and the 19 other states rejecting Medicaid expansion are leaving billions of dollars in federal aid on the table, even as their taxpayers pay to cover the expansion costs in states that have implemented that provision of the Affordable Care Act, according to a new report from the Commonwealth Fund.
The report was based on an examination of federal taxes paid by residents in each state. It concluded Kansas would see a net loss of $950 million in 2022, assuming it was the only state in the nation that had not expanded its program eligibility. The report also projected that if Kansas chose to expand Medicaid, it's share of the cost in 2022 would total $108 million compared to the $1.2 billion the state is projected to devote to business incentives and subsidies.
States with the highest net losses, according to the report, included Texas, which would see a net loss of $9.2 billion, Florida, $5 billion; Georgia, $2.9 billion; and Virginia, $2.8 billion, assuming each of those states was the last to forego expansion.
According to the report: "No state would experience a positive flow of funds by choosing to reject the Medicaid expansion. Because the federal share of the Medicaid expansion is so much greater than the state share, taxpayers in non-participating states will nonetheless bear a significant share of the overall cost of the expansion through federal tax benefits - and not enjoy any of the benefits."
The report also briefly described what some states are doing to cover their share of costs associated with expanding Medicaid, including health care provider taxes or using funds obtained from the conversion of nonprofit hospitals or insurers to for-profit entities.
Here is what some other news outlets have reported about the study:
Health Leaders Media: States Rejecting Medicaid Expansion Forego Billions in Federal Funds
The study is the first to calculate the net cost to taxpayers in states turning down Medicaid expansion. Using data from the Urban Institute projecting Medicaid enrollment and spending under the law in the year 2022, researchers estimated the effects of states' decisions about whether to accept the health reform law's expansion of the Medicaid program to residents with incomes at or below 138 percent of the federal poverty level (Commins, 12/5).
The Washington Post: Refusing Medicaid Expansion Will Cost States Billions Of Dollars, Study Finds
When the Supreme Court ruled in 2012 that the federal government could not compel states to expand their Medicaid programs under the Affordable Care Act, it gave Republican opponents of the measure the opportunity to decline to participate in one of the law’s central tenets. But a new study estimates the decision not to participate will cost those states billions of dollars over the next decade — costs that will be passed on to taxpayers. The Affordable Care Act requires the federal government to pay 100 percent of the costs of expanding Medicaid for three years. After that period, the law mandates the federal government pay 90 percent of the costs of expansion (Wilson, 12/5).
All 20 of the states choosing not to expand Medicaid have Republican governors. Many have said increasing Medicaid could add to the federal deficit. Others have long opposed the law since its passage in 2010. Medicaid, however, is a federal program, Glied said, and residents of states that have not expanded the program are still paying taxes to support it. They're just not getting the extra benefits in their states. 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, Glied said (Kennedy, 12/5).
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