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States that Didn’t Expand Medcaid Ended Up Paying More for the Program

Former Arizona Governor Jan Brewer was one of the only Republican governors in the country to support Medicaid expansion made available under the Affordable Care Act (commonly referred to as Obamacare). Brewer’s move was hotly contested, and Republicans filed several lawsuits challenging the move. However, the expansion still stands, and more than 340,000 Arizonans (up from the initially predicted 300,000) currently have health insurance that would have otherwise been ineligible for Medicaid if not for Obamacare and Brewer’s actions made possible by the law. Challenges, however, still remain as a lawsuit is pending in Maricopa County Court.

At the time, hospitals and healthcare providers were strongly in favor of expanding Medicaid and lobbied state governments across the country to promote expansion. By expanding coverage, hospitals argued that fewer individuals would be uninsured and use the costly care of the emergency room as their primary care physician. Healthcare providers would no longer need to shift these costs to the insured, bringing prices down across the board.

Republicans opponents, on the other hand, argued that expansion would saddle states with a bigger chunk of the Medicaid pricetag. The argument never made much sense since most studies showed that expanding coverage would actually reduce costs, but to the opposition, facts did not matter. Wholesale opposition to President Obama and anything he touches ruled the day in most Republican controlled states.

Now, for the first time, a new study shows that states that did not expand Medicaid coverage under Obamacare are as predicted, actually paying more for Medicaid than states that did. As a result, Obama and his supporters in state legislatures across the country, along with Republicans like Brewer, are laughing all the way to the bank.

According to the Kaiser Family Foundation, Republican run states that did not undergo expansion are witnessing their portion of Medicaid costs increase more steadily and more sharply than states that expanded the program. Laura Snyder, senior policy analyst at the Kaiser Family Foundation notes “We did see a higher growth rate of what states spent of their own dollars on Medicaid in the in non-expansion states than we did in the expansion states.” According to the report, overall spending in expansion states increased by 17.7%, while state spending rose 3.4%, well below the healthcare industry rate of inflation. In non-expansion states, spending on Medicaid rose 6.1%, but the state was forced to spend 6.9% more. In addition, in expansion states, enrollment increased 18%, while in non-expansion states enrollment increased only 5.1%. This means that non-expansion states are paying more for Medicaid, without the benefit of insuring more state residents.

The report also highlights cost savings in states like Kentucky, which is traditionally conservative and underserved by healthcare, but was able to expand coverage due to the actions of a Democratic governor. According to Snyder, Kentucky will continue to see savings from the program, even after federal assistance is partially fazed out in a few years. Furthermore, overall hospital emergency room admission numbers in Kentucky are lower than they would have otherwise been if Medicaid was not expanded.

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