Perrspectives - Bringing light to Darkness

Medicaid Rejection Costing Red States Billions of Dollars, Thousands of Lives

September 4, 2014

Can you put a cost on stupid? In the case of Republican-led states rejecting Obamacare's expansion of Medicaid coverage to their low income residents, The answer is a resounding "yes." Florida, Texas, North Carolina and 20 other No states aren't merely losing billions in federal funds to provide insurance for millions of their residents. As a new analysis by McClatchy found, "they'll pay $152 billion to extend the program in other states--while receiving nothing in return." And that price tag comes with a body count, too: as many as 17,000 of those left uninsured will needlessly die every year.

Using data from research by the Urban Institute, McClatchy explained the staggering cost of sheer spite in GOP-controlled states that said no to free money from Washington. In a rare reversal of red state socialism, the 23 holdouts by choice get nothing while their taxpayers foot 37 percent of the cost of Medicaid expansion in the 27 "yes" states:

Most of the money, nearly $88 billion, would come from taxpayers in just five non-expansion states: Texas, Florida, North Carolina, Georgia and Virginia...
Non-expansion states would see direct benefits from their $152 billion only if they reversed course and expanded eligibility for Medicaid, the state and federal health program for low-income Americans. The health care law provides financial incentives for states to extend Medicaid coverage to adults who earn up to 138 percent of the federal poverty level.
If the non-expansion states did so, they'd still have to pay the $152 billion. But the 23 states also would split nearly $386 billion in federal Medicaid funding from 2013 to 2022, according to Urban Institute estimates.

And as a 2013 study from Harvard Medical School ("Opting Out Of Medicaid Expansion: The Health And Financial Impacts") revealed, up to 7.7 million residents in the Medicaid rejecting states could gain coverage if their Republican governors and/or legislatures simply changed their minds. But by saying no to a federal program that provides 100 percent of the funding through 2017 and 90 percent after that, GOP leaders are condemning between 7,000 and 17,000 uninsured to unnecessary deaths:

Nationwide, 47,950,687 people were uninsured in 2012; the number of uninsured is expected to decrease by about 16 million after implementation of the ACA, leaving 32,202,633 uninsured. Nearly 8 million of these remaining uninsured would have gotten coverage had their state opted in. States opting in to Medicaid expansion will experience a decrease of 48.9 percent in their uninsured population versus an 18.1 percent decrease in opt-out states...
We estimate the number of deaths attributable to the lack of Medicaid expansion in opt-out states at between 7,115 and 17,104. Medicaid expansion in opt-out states would have resulted in 712,037 fewer persons screening positive for depression and 240,700 fewer individuals suffering catastrophic medical expenditures. Medicaid expansion in these states would have resulted in 422,553 more diabetics receiving medication for their illness, 195,492 more mammograms among women age 50-64 years and 443,677 more pap smears among women age 21-64. Expansion would have resulted in an additional 658,888 women in need of mammograms gaining insurance, as well as 3.1 million women who should receive regular pap smears.

To put those findings in terms Republicans can understand, up to 3,000 of Rick Perry's Texans will needlessly die each year. Those dead will joined by up to 671 from Scott Walker's Wisconsin, 1,176 in Nathan Deal's Georgia, 2,221 in Rick Scott's Florida and 1,145 in Pat McGrory's North Carolina. It's no wonder Ohio GOP Gov. John Kasich got biblical on Buckeye State Republicans to extend Medicaid coverage to 300,000 of their state's residents:

"When you die and get to the meeting with St. Peter, he's probably not going to ask you much about what you did about keeping government small, but he's going to ask you what you did for the poor. You'd better have a good answer."

A good answer not just for red state taxpayers, but for red state hospitals as well. While hospitals in the Medicaid opt-in states are thriving, the situation in places like Georgia, North Carolina and Tennessee is increasingly dire. Many hospitals and clinics serving rural and low-income residents in those states are closing or in crisis because Republicans said no to Medicaid expansion. The New York Times explained the dynamic at work as these states willingly left millions uninsured even as "disproportionate share payments to hospitals (DSH) begin to decline:

Now, in a perverse twist, many of the poor people who rely on safety-net hospitals like Memorial will be doubly unlucky. A government subsidy, little known outside health policy circles but critical to the hospitals' survival, is being sharply reduced under the new health law.
The subsidy, which for years has helped defray the cost of uncompensated and undercompensated care, was cut substantially on the assumption that the hospitals would replace much of the lost income with payments for patients newly covered by Medicaid or private insurance. But now the hospitals in states like Georgia will get neither the new Medicaid patients nor most of the old subsidies, which many say are crucial to the mission of care for the poor.

Ironically, taxpayers in those states will be left to pick up the tab for the uncompensated care of the uninsured, a bill which in most of the rejectionist states will cost more than the annual Medicaid contribution they'd have to pay after 2017. A 2013 Rand Corporation study of 14 opt-out states revealed that penny-wise, pound foolish approach, one Ezra Klein and Evan Soltas summed up this way:

So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That's a lot of self-inflicted pain to make a political point.

And that self-inflicted pain comes with a price tag and a body count. Dozens of shuttered hospitals, 7 million remaining uninsured, up to 17,000 dead annually and billions of dollars in payments by red state taxpayers to blue state Medicaid beneficiaries. That is the high cost of Republican stupidity.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

Follow Us

© 2004 - 
 Perrspectives. All Rights Reserved.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram