Medicaid Inaction Costly, Study Shows

Jun 6, 2013

Last month, state lawmakers ended their 2013 session without taking action on Medicaid expansion, leaving $51 billion dollars in federal funds on the table. That inaction could cost both taxpayers and employers a bundle, as a new report shows.

House Speaker Will Weatherford blocked Medicaid expansion.

A Rand Corporation study published in Health Affairs this week concluded that states refusing the Medicaid deal will spend far more on state and local expenditures for care of the uninsured in coming years than they would for Medicaid expansion under the Affordable Care Act. Most of the cost of the expansion is borne by the federal government.

Supporters of the expansion -- or at least a privatized version of it -- have said that all along. But critics have publicized reports that appeared to contradict that.

The Rand Corp. is generally recognized as non-partisan and specializes in studies that help decision-makers in both private industry and government.

The study covers the first 14 states that were thought likely to deny the expansion, and does not include Florida. Those 14 states would collectively spend $1 billion more in the year 2016 because of the decision, the Rand study found. 

“Our analysis shows it's in the best economic interests of states to expand Medicaid under the terms of the federal Affordable Care Act,” said Carter Price, a mathematician at Rand who served as the study's lead author.

The findings are in line with the latest predictions from the state Agency for Health Care Administration, as Health News Florida reported in April.

Meanwhile, as reporter Lucy Morgan reports for Bloomberg News, the Florida House's decision to block the Senate -- which was willing to accept the federal funds for a privatized version of Medicaid expansion -- was based on an argument that could be called hypocritical.

The Florida Legislature generally has no problem accepting federal funds for roads, universities, and other purposes, she writes, but the House was unwilling to accept federal funds tied to the Affordable Care Act.

The measure also led business lobbying groups that usually oppose expansion of government programs to switch positions, she writes.

Health News Florida has reported on the business angle several times, most recently with Health News Florida free-lancer Bob LaMendola’s article Health Experts on Medicaid Rejection: Bad for  Business.

A recent half-hour WUSF radio program, Florida Matters, talked with lawmakers about why they rejected Medicaid expansion. They said they didn't trust the federal government to come through with the money, given the deficit.