Report: States Opting Out Of Medicaid Expansion Will Lose Billions

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States not expanding Medicaid under Obamacare will be collectively lose more than $35 billion in federal funds in 2022 alone, according to a new report from the Commonwealth Fund.

Texas ($9.2 billion), Florida ($5 billion), Georgia ($2.9 billion), Virginia ($2.8 billion) and North Carolina ($2.6 billion) will be the biggest losers, according to the organization, which supports Obamacare. The study’s projections of the budget impact nearly a decade out relied on estimates of Medicaid expansion eligibility and spending in 2022 from the Urban Institute to reach its conclusion.

The report covered 20 states, all with Republican governors and/or state legislatures that refused to expand Medicaid under the health care reform law after the U.S. Supreme Court made it optional in June. It did not include several states (such as Pennsylvania and New Hampshire) where expansion is not yet finalized, but state officials are working toward it.

“In states that elect not to expand Medicaid, millions of their most vulnerable residents will be unable to gain health insurance,” Commonwealth Fund President David Blumenthal said in a statement. “Those same states will be forgoing billions in federal funds while paying for other areas to provide expanded coverage. In light of these facts, it seems likely that non-expanding states will face increasing pressure over time to reconsider their decisions.”

Under Obamacare, the federal government covers 100 percent of the costs for the first three years and never less than 90 percent after that.

The Commonwealth Fund further explained the study’s methodology as follows:

Federal funds that pay for state Medicaid programs are raised through federal general revenue collection—taxes paid by residents in all states—whether or not they participate in the program. Therefore, taxpayers in states not participating in the Medicaid expansion will bear a share of the overall cost, without benefitting from the program. Glied and Ma estimated the net loss of federal funds to states that do not expand Medicaid by using projected federal Medicaid spending in each state and calculating the federal Medicaid-related taxes paid by each state.

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