Not expanding Medicaid, losing federal subsidies would hurt states

An estimated 9.8 million Americans may be uninsured come 2016 should states continue to forgo Medicaid expansion and should the Supreme Court side with the plaintiffs in King v. Burwell and determine federal subsidies are illegal in states not operating their own health insurance exchanges, according to a new issue brief from the Robert Wood Johnson Foundation (RWJF).  

The brief examined the 20 states that chose to not expand Medicaid and would be affected if the Court strikes down federal subsidies. This combination could result in an increase of uninsured individuals and the loss of federal spending on healthcare in each state.

Here are the key takeaways from the brief:

  • Should those 20 states continue to forgo Medicaid expansion through 2016, an estimated 4.2 million people will be uninsured. On top of that, another 5.6 million people will be uninsured if federal subsidies are eliminated.
  • Of the combined 9.8 million individuals, 2.5 million live in Texas and 1.8 million live in Florida.
  • Without the Affordable Care Act as a whole, 21.9 million people in the 20 states would be uninsured.
  • By not expanding Medicaid, the 20 states would lose out on $41 billion in federal spending in 2016. Additionally, if tax credits disappear, the states would lose another $21 billion in federal spending on subsidies and cost-sharing reductions.
  • From 2016 to 2025, not expanding Medicaid would cost these states $483 billion in federal spending. A Court decision striking down subsidies would lead to additional losses of $238 billion, for a total loss of $721 billion in federal spending over that decade.

While both factors will play a key role for states, the RWJF concluded, "states that have not expanded Medicaid have the most to lose in the King v. Burwell decision if they are not already running their own marketplaces because people with incomes between 100 and 138 percent of the federal poverty level would not get any assistance in affording healthcare."

Nationwide, states continue to toy with expanding Medicaid despite strong opposition, while others prepare to possibly establish their own exchanges should the Supreme Court rule against subsidies, FierceHealthPayer previously reported.

For more:
- here's the brief

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