Medicaid Expansion Report Calculates Modest State Costs

"Many states will be surprised at the results showing that the cost to them of the coverage expansion in the Affordable Care Act comes largely from things they must do, and that the choice about expanding Medicaid is a very small share of the ultimate cost that states may face," Weil says. "But that finding is also a reminder of the importance of not just looking at total cost but disaggregating where they come from. Many states, when they talk about potential costs of Medicaid expansion, are actually lumping together all costs and not just looking at the effect of the expansion."

When the U.S. Supreme Court upheld key provisions of PPACA last June, it also struck down as overly coercive the federal government's demands that states expand their Medicaid rolls. Resistance to expanding the rolls, particularly among Republican governors, reached a crescendo in July when Texas Gov. Rick Perry sent a letter to Health and Human Services Secretary Kathleen Sebelius. Perry, who was running for president at the time, explained that the Lone Star State stood "proudly with the growing chorus of governors who reject the PPACA power grab. ... Neither a state exchange nor the expansion of Medicaid under the Orwellian-named PPACA would result in better patient protection or in more affordable care."

President Barack Obama's reelection may have caused some governors' to reconsider their options. But many Republicans see the Medicaid expansion as merely throwing good money after bad to fix a dysfunctional program.

"Even President Obama has recognized Medicaid is broken," says Mike Schrimpf, spokesman for the Republican Governors Association. "For many states, placing more individuals into a broken system would be like adding more passengers to the Titanic. And regardless of whether it's federal dollars or state dollars, taxpayers are still on the hook."