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States Divided on Expanding Medicaid

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States Divided on Expanding Medicaid

July 5, 2012

The June 28 Supreme Court ruling upholding the Affordable Care Act (ACA) also limited the Medicaid expansion provision, effectively reducing it to an "opt-in" program for states.

Several commentators are quick to point out, however, that the Medicaid expansion is very much a bargain, as it would be funded with 90% federal funds at its lowest funding level. As the Center on Budget and Policy Priorities notes in its blog, the federal government would bear nearly 93% of the costs of the Medicaid expansion for the first nine years, representing an additional cost to states of only a 2.8% increase over what they would have spent had the ACA not been upheld.

The actual numbers are even better, as that figure doesn't take into account cost savings that state and local governments will realize in health-care costs for the uninsured. States that have the highest level of poverty or near-poverty would benefit the most, as discussed in this Governing blog.

Despite the increased funding by the federal government to expand Medicaid coverage, several governors have already voiced objections to accepting the terms of the expansion, resolving to refuse to implement the program and asking Congress to work to repeal the ACA.

ThinkProgress posted findings from a survey it conducted, in which ten governors have said definitively they will not accept the additional funds, and 19 are considering other options. Kaiser Health News reported that Medicaid directors are concerned at the impact on their states' budgets should they accept the additional funds. Although the expansion would be almost entirely funded by federal funds, states would have to make up the additional approximately 7% to fund the program, which means coming up with additional funds that many states do not have available without cutting back on other programs. This problem is amplified in states that have higher rates of poverty, since a higher percentage of people would be eligible under the expansion.

For further reading, check out the links provided by Kaiser Health News' BlogWatch.

The Associated Press also put out a state-by-state listing of where all 50 states and the District of Columbia stand on implementing the health care law.