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States Rejecting Medicaid Expansion Forgo Billions in Federal Funds

John Commins, for HealthLeaders Media, December 5, 2013

Collins says the study may actually be low-balling the costs to residents of states that reject the Medicaid expansion, because it does not factor in the value of cost-shifting as a hidden tax to pay for uncompensated care. "It actually is an underestimate in some ways because local tax dollars finance uncompensated care at hospitals," she says. "To the extent that those federal dollars would replace that, those local expenditures that local taxpayers are still financing would otherwise be covered were people to have health insurance coverage."

Collins says there are signs that some states are beginning to reconsider their rejection of Medicaid expansion, now that they face the loss of billions of dollars in federal aid.

"Over time, states are going to look at the costs both in terms of lost health insurance coverage for residents but also the significant economic impact on their states and on their safety net hospitals, who will continue to have to serve people who are uninsured even though there is federal funding available for them," she says. "The argument and rationale for expanding Medicaid is pretty strong on multiple counts. We may see a similar trend that we saw in the original Medicaid program, that all states eventually participated in the program just as they did eventually with the Children's Health Insurance Program."


John Commins is a senior editor with HealthLeaders Media.

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2 comments on "States Rejecting Medicaid Expansion Forgo Billions in Federal Funds"


Todd (12/15/2013 at 11:40 AM)
"In addition to improving access to care and financial security for the newly insured..." Exactly how does this expansion guarantee access? Providers have to take on all those additiona patients at low reimbursements.

Robert Trinka (12/5/2013 at 5:02 PM)
Irrespective of the short run benefits to a state of expanding Medicaid and accepting Federal funds, the fact is that expanding the Medicaid program will create massive liabilities for states that are participating. The long run unfunded liabilities of this program will be in the trillions of dollars over the next 10+ years. As a state taxpayer, I fully support my state's decision not to take on these liabilities for a short-term fix. And consider whether the Federal Government will be able to meet its obligations under the program and make the payments to the states as promised - that is not guaranteed. There are other, less expensive and less risky ways to provide healthcare to a state's population.