Not expanding Medicaid will damage states' hospitals--and their economies

About half of the states in the country have declined to expand Medicaid eligibility as part of the Affordable Care Act--a decision that will cost them and their providers tens of billions of dollars over the next several years, the Washington Post reported.

A recent Commonwealth Fund survey reported that Texas will forego $9.4 billion in Medicaid funds from the federal government by 2022, and Florida will lose more than $5 billion, according to the Post. Georgia, Virginia and North Carolina will lose more than $2 billion apiece.

Not only will the states' providers be on the hook for uncompensated care costs that won't exist in states that are expanding the Medicaid program, but the Commonwealth Fund suggested that they will sacrifice economic growth as well.

"States that choose to participate in the Medicaid expansion will gain considerable new federal funds," the report said. "States often seek to increase their share of federal funds, lobbying for military bases, procurement contracts, and highway funds. Federal funding provides direct benefits and bolsters local economies."

Sherry Gilead, the study's lead author, told USA Today that those states were sacrificing potential job-creating funds. "There's new money flowing into the states. It's sort of like why states are eager to get defense contracts: It can be used to create jobs," she said.

The federal government has offered to pay 100 percent of the cost during the first three years of expansion, and 90 percent in future years. The states that have declined Medicaid funding or whose leadership have yet to make up their minds on the issue say that it would be a waste of taxpayer funds and are concerned the government won't make good on its promises to pay.

The Commonwealth Fund report also noted that states that do not expand Medicaid will still have to fork over federal taxes that will cover the costs of Medicaid expansion elsewhere. And the states that refused to expand Medicaid won't actually save money.

To learn more:
- read the Washington Post article
- here's the USA Today article
- check out the Commonwealth Fund survey

Related Articles:
Cuts, closures face top hospitals in states that didn't expand Medicaid
A state-by-state look at uninsured rates under healthcare reform
Feds: It's not too late to expand Medicaid
Hospital DSH payments to plummet without Medicaid expansion
Hospitals should play political hardball to get Medicaid expanded

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