States Are Turning Down an Insane Amount of Free Money by Refusing to Expand Medicaid

Acute case of fiscal malpractice, coming through.

Photo by Joe Raedle/Getty Images

Because Republican politicians are widely more interested in sabotaging Obamacare than in providing health insurance to low-income families, there are still 24 states that have rejected the law’s expansion of Medicaid, which is of course almost entirely paid for by the federal government. In a recent report, the Robert Wood Johnson Foundation and Urban Institute found that those lawmakers are leaving a total of $423.6 billion on the table over the next 10 years. At the New Republic, Jonathan Cohn maps out all that forsaken cash. Florida is missing out on the most, forgoing a total of $66.1 billion, followed by Texas, which is turning down $65.1 billion. This is a picture of states where elected officials have chosen to cut off their noses in order to spite their faces.

Jonathan Cohn/the New Republic

Worse yet, the numbers don’t include the $167.8 billion worth of increased reimbursement payments hospitals are missing out on.

Conservatives who object to the Medicaid expansion argue it’s a budget-buster because, while Washington foots most of the bill, states still have to pay some of it. According to the Urban Institute report, it would cost all 24 states $31 billion in 10 years if they decided to participate. But as the researchers note, that number is misleading, because it ignores all of the cost savings that the expansion brings.

For instance, some coverage that existed before the Affordable Care Act would become eligible for higher federal assistance payments. Many residents who rely on purely state-funded programs, such as mental health treatment for the poor, would be covered by Medicaid instead. And most states would get a tax revenue boost, thanks to all the new federal money flowing into hospitals. The Urban Institute found comprehensive budget analyses that took those sorts of factors into account for 16 states, including large holdouts like Texas, Pennsylvania, and Virginia. All of them suggested that, on net, the Medicaid expansion would improve the state budget.

Republicans in Texas, Florida, and their fellow refusenik states better enjoy denying health insurance to the needy on principle. Because it’s not doing their state finances any favors.