Study: States not expanding Medicaid forfeit billions

But residents still pay for benefits in other states

0 | Health Reform, Medicaid-CHIP

— 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).

USA Today: States that reject Medicaid expansion lose money, study finds

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).

KHI News Service coverage of Medicaid expansion

Medicaid Access Coalition launches online "ticker" showing foregone federal dollars (2/13/14)
→ KHI report: Nearly 182,000 Kansans in the ‘Eligibility Gap’ (1/11/14)
House speaker says Medicaid expansion is "up to the governor" (1/10/14)
KS Senate president says Medicaid expansion unlikely to gain approval this session (1/7/14)
Profiles of the coverage gap: Kathleen Christian (1/6/14)
Efforts continue to expand Medicaid in Kansas and Missouri (1/6/14)
Hospital association hires former Bush HHS secretary to help craft a plan Kansas Republicans might support (12/23/13)
Iowa wins approval to expand Medicaid by using federal funds to buy private insurance (12/11/13)
White House officials hold call to urge Medicaid expansion in Kansas (11/21/13)
Republican governor talks up plan to expand Medicaid — his way (10/28/13)
Challenger says Brownback owes voters a decision on Medicaid expansion (10/22/13)
Nearly 5.2M Americans fall in coverage gap in states not expanding Medicaid (10/16/13)
Sebelius: Feds flexible on how states expand Medicaid (9/22/13)
Sebelius says Kansas and Missouri are missing the boat on Medicaid expansion (9/20/13)
Medicaid expansion coalition finds strength in numbers (9/17/13)
Republican Gov. Corbett proposes expanding Pennsylvania Medicaid (9/16/13)
Kansas lawmakers urged to consider Medicaid expansion by Wesley CEO (8/29/13)
Estimating maneuver could help more people gain from Obamacare: How the poor might qualify for Affordable Care Act subsidies in states that don't expand Medicaid (8/12/13)
Report: States not expanding Medicaid stand to benefit most from doing so (7/18/13)
CMS won’t penalize hospitals in states slow to expand Medicaid (5/14/13)
Insurer Centene: We can do Arkansas-style Medicaid (5/14/13)
The Arkansas Medicaid Model: What you need to know about the 'private option' (5/2/13)
Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
Brownback says he's listening to Medicaid expansion proponents, opponents (4/5/13)
Oregon shows costs of putting Medicaid enrollees in private coverage (3/29/13)
Governor urged to expand Medicaid eligibility (3/27/13)
Arkansas Medicaid expansion attracts other states' interest (3/26/13)
Senate president prefers options remain open on Medicaid expansion (3/25/13)
States urged to expand Medicaid with private insurance (3/22/13)
Senate budget amendment underscores opposition to Medicaid expansion (3/21/13)
Study: Kansas employers face millions a year in possible penalties without Medicaid expansion (3/15/13)
More than 30 Kansas groups pushing for Medicaid expansion (3/12/13)
Health insurers see big opportunities in health law’s Medicaid expansion (3/8/13)
Medicaid expansion supporters to step up lobbying efforts (3/7/13)
Budget committee hears resolution opposing Medicaid expansion (2/22/13)
Legislators focusing on Medicaid expansion cost estimates (2/19/13)
Kansas hospital group study predicts expanding Medicaid would generate 4,000 jobs (2/18/13)
Brownback officials release their cost projections for Medicaid expansion (2/8/13)
Medicaid expansion bill introduced (1/22/13)
Kansas hospitals worried about loss of dollars for charity care (1/14/13)
Brownback compiling own estimate of Medicaid expansion cost (12/20/12)
Group urges Brownback to expand Medicaid eligibility (11/9/12)
Debate begins on possible Kansas Medicaid expansion (10/25/12)
Amerigroup CEO says states ‘need’ to go along with Medicaid expansion (7/11/12)
Kansas hospitals ready to get on with federal health reform, spokesman says (7/2/12)
Kansas AG claims partial victory in health reform case (6/29/12)
High court upholds Affordable Care Act, but ruling puts limits on Medicaid expansion (6/28/12)

Commentary
→ Kansas Hospital Association: An opportunity for the Kansas Medicaid program
→ Americans for Prosperity-Kansas: Well-intentioned policies do more harm than good
→ Health Reform Resource Project: The cost of not expanding Medicaid
→ Rep. Jim Ward: Medicaid expansion essential for healthier Kansas
→ Rep. David Crum: Reasons for opposing Medicaid expansion
→ National Academy for State Health Policy: Much ado about Arkansas: Medicaid in the insurance exchange

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