Coffers and hospitals losing money in states not expanding Medicaid
States that made the choice not to expand Medicaid are missing out on a lot of federal government money, according to a a new report released by the Urban Institute and Robert Wood Johnson Foundation (RWJF). To date, the document is one of the most comprehensive on this issue. It found that not only are millions of residents in non-expansion states being denied health insurance, but also estimates that local hospitals are losing out on billions of dollars that they desperately need.
In “The Coverage Gap,” Fault Lines examined a new health care dichotomy in the United States—where millions of low-income Americans in certain states have no option for affordable insurance because their elected officials have decided not to make Medicaid available to more residents.
Under the Affordable Care Act, the federal government vowed to fully fund Medicaid expansion for three years, after which it would fund at least 90 percent. According to the law, states will never have to pay more than 10 percent of the cost. It sounds like a sweet deal for states, and many studies on the fiscal impacts agree. In “The Coverage Gap,” opponents argued that Medicaid is a broken, unsustainable system that is too costly for states.
The new report found that for every $1 a state invests in Medicaid expansion, $13.41 in federal funds will flow its way. There are currently 24 states that have not accepted Medicaid expansion. And those states stand to lose out on $423.6 billion in federal funds over the next decade.
Medicaid expansion was conceived as a major component of President Obama’s health care legislation. But a Supreme Court ruling made it optional and effectively gave state leaders that opposed the law a way to obstruct it. The Urban Institute/RWJF report highlights the disparity created in the wake of states’ decisions. In states that have expanded Medicaid, the number of uninsured has dropped by 38 percent since September. The uninsured population in non-expansion states declined by only 9 percent.
During the course of our reporting for “The Coverage Gap,” we spoke with dozens of chronically ill Americans who cannot get the care they need. In Houston, Texas, we met Latoya White, a 34-year-old mother of three who was born with sickle cell anemia. She was denied Medicaid under the state’s current guidelines. White often suffers from what she calls ‘sickle cell crises’ and ends up in the hospital for weeks at a time, racking up thousands of dollars in medical bills she cannot pay.
As she incurs mounting debt and bad credit, the hospital has to find a way to cover the costs. The Urban Institute/RWJF report projects that hospitals in non-expansion states like Texas will lose out on $167.8 billion over the next decade. Without those funds, some hospitals face a fiscal tipping point. In states that welcome Medicaid expansion, hospitals will benefit from millions more insured patients.
Latoya White is frustrated by Texas Governor Rick Perry’s decision to reject expansion. “The money’s already there,” she told Fault Lines. “All he has to do is say yes.”
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