Obamacare vs. Medicaid Expansion – What’s Best for the Consumers

Written by: Ellen Burke

Back in March, we told you about how one of the key provisions of the Affordable Care Act (ACA) was an expansion of the Medicaid program. Since Medicaid provides free or low-cost health coverage to millions of low-income Americans, this was an important provision of the ACA since it would serve to close a gap in medical coverage for Medicaid recipients (to include anyone under 65 with an annual income below $15,282).

As we told you in our earlier article, 14 states had decided not to participate in the Medicaid expansion, citing financial concerns for having to cover so many additional people through the program (despite receiving the federal funds to do so). That number is now up to 20 states and all are led by Republican governors. The party line seems to be that they believe that the expansion of Medicaid will increase the federal deficit. What they seem to overlook in their logic is that since Medicaid is a federal program, the citizens of their states are paying taxes to fund the program and will not reap any of the benefits of the expansion of the program.

Since Medicaid is currently funded through cost-sharing with both the federal and state governments paying a percentage of the cost, the expansion that will become effective on January 1, 2014 means that the federal government will pay 100% of the additional costs associated with closing the Medicaid gap to extend coverage to the people mentioned above who are at or below the $15,282 federal poverty level.

The Commonwealth Fund, a private foundation working to promote a high performing health care system (particularly for low income families and the uninsured), has conducted a study of the effects of rejecting the Medicaid expansion funds by the 20 states that are doing so. Florida will lose $5 billion, Georgia will lose nearly $3 billion and Texas will lose over $9 billion. As Sherry Glied (the author of the study) said “Nobody wins”.  And here’s why.

When the ACA was drafted, it was written based on the logical assumption that states would expand Medicaid (particularly since the federal government would be paying for such expansion). Because of that, there were no provisions included in the ACA for low-cost health insurance options for the very poor. So if your state doesn’t expand Medicaid and you’d be eligible for it, you’re now between the proverbial rock and hard place of trying to find your own health insurance without being eligible for any of the federal subsidies or tax benefits that the rest of the population is.

And it’s not just major news outlets reporting this story. The editorial board of The Times-Picayune, one of New Orleans’ leading newspapers, published an editorial on December 8 urging Governor Bobby Jindal (a potential 2016 Republican Presidential candidate) to take the Medicaid expansion funding. The paper correctly points out that the tax dollars paid by the citizens of Louisiana will now be redirected to the states that have agreed to accept Medicaid expansion funding and that nearly 243,000 uninsured Louisiana citizens wont have access to health coverage because of Governor Jindal’s decision.

My mother (and probably your mother or school teacher) has always quoted a proverb about the foolishness of cutting off your nose to spite your face. While I wouldn’t exactly equate that with what these Governors are doing, if you’re newly eligible for Medicaid coverage under the ACA expansion program, you might want to write a thank you note to Governor Jindal or any of the other Governors who’ve rejected the program. Because the extra money your state is getting is money that could have and should have been used to help the citizens in their states.



Obamacare vs. Medicaid Expansion – What’s...

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