Why Did States Refuse Medicaid Expansion Money Offered Under the Affordable Care Act?

Why Did States Refuse Medicaid Expansion Money Offered Under the Affordable Care Act?

Why did states refuse medicaid expansion money offered under the affordable care act

A few states decided to refuse medicaid expansion money offered under the affordable care act (ACA). They did so for a number of reasons.

The decision left 2.2 million people without health insurance and deprived them of the significant benefits that Medicaid expansion provides.

1. It was a good deal

When the Affordable Care Act passed, a number of states refused to expand Medicaid. As a result, millions of people in 12 red states remained uninsured.

A dozen years later, though, the political winds have started to shift in holdouts like North Carolina, Georgia and Texas. Leaders there are courting rural voters, assessing new financial incentives and confronting the bipartisan popularity of expanding health coverage.

That makes them more likely to embrace expansion. Some Republican lawmakers even co-sponsored expansion bills, an indication of “cracks in their opposition,” Luis Figueroa, legislative and policy director at Every Texan, told Axios Austin’s Nicole Cobler and Asher Price.

One possible solution is a federal program that provides coverage to the 2.2 million people in non-expansion states who still don’t have it. However, that could be a very difficult policy to implement politically, as well as an expensive endeavor for the government. The alternative would be to treat the non-expansion states differently from expansion ones — but the courts would have to decide whether that’s a fair way to do it.

2. They were philosophically opposed to Obama and/or taxpayer supported universal healthcare

As the Obama administration continued to push for universal health care, many states became philosophically opposed to Obama and/or taxpayer supported universal healthcare. They may have argued that it was too costly, or it included provisions that were unacceptable to principled conservatives.

They also feared it could lead to a socialized medical system and a government-run health insurance industry that would be incompatible with their state’s free market capitalism and limited government traditions.

However, there is a growing consensus among experts that Medicaid expansion is a valuable way to expand coverage and improve health outcomes for low-income Americans. And as a result, 12 states that haven’t expanded Medicaid are negotiating for the chance to do so, according to Axios Atlanta and CBPP.

Some of these discussions are focused on finding a solution for people like Briana Wright, who makes too little money to qualify for Medicaid in her state and doesn’t have access to the Affordable Care Act insurance marketplaces. Some advocates are arguing that we should create a new federal Medicaid program specifically for people who fall into this coverage gap.

3. They were worried about the cost

The Affordable Care Act, passed in 2010, offers a new source of federal funding to states to expand Medicaid to people earning up to 138 percent of the poverty level. The federal government will initially pay for 90 percent of the cost, with the state receiving 10 percent.

This is a large share of the cost, and states were concerned about how they could afford to pay it. They worried that their budgets would become too tight if they raised taxes to cover their share of the expansion.

The good news is that there are other ways for states to reduce costs and increase revenues without raising taxes, including savings in non-Medicaid programs. Some states have realized substantial savings outside of Medicaid and are experiencing net fiscal gains in their traditional Medicaid programs.

4. They were worried about the politics

Medicaid expansion is a major step toward the goal of near-universal coverage. It improves access to affordable, high-quality health care for all and protects consumers from abusive insurance company practices.

The policy is popular, and it has helped to slash rates of uninsurance by at least 15 percent since 2014, according to UC Berkeley School of Public Health researchers. However, it has been a political issue in many states, particularly those with Republican governors.

In addition, states may be concerned that expanding Medicaid will make it easier for Congress to repeal the Affordable Care Act in a future budget deal. The ACA’s established funding for Medicaid expansion will pay for 90 percent of the cost for newly eligible enrollees, and the federal government would pay the remaining 10 percent.

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About the Author: Raymond Donovan