White House Report Says States Refusing Medicaid Expansion Lost Out on $88 Billion

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By Nathaniel Weixel  

July 2 --States that didn't expand Medicaid have missed out on $88 billion through 2016, according to a July 2 report from the White House Council of Economic Advisers.

According to the analysis, if the 24 states that haven't expanded Medicaid eligibility under the Affordable Care Act had done so by Jan. 1, they could have received an additional $88 billion in federal funds by calendar year 2016 that could have created 379,000 jobs through 2017. States that have already expanded Medicaid will receive $84 billion over that period, the report said.

“This evidence is clear that the consequences of states' decisions are far-reaching, with implications for the health and well-being of their citizens, their economies, and the economy of the nation as a whole,” the report said.

The report, “Missed Opportunities: The Consequences of State Decisions Not to Expand Medicaid,” comes two years after the Supreme Court ruled that expansion was optional for states. To date, 26 states and the District of Columbia have expanded Medicaid eligibility.

The report said that more than 4.3 million people will gain health coverage by 2016 in the 26 states where Medicaid was expanded. In the 24 states that haven't expanded Medicaid, an estimated 5.7 million will go without health coverage.

In some of those states, opposition to expansion remains strong. Georgia Gov. Nathan Deal (R), for example, has spoken against Medicaid expansion since 2012, while embracing the idea floated by national Republican leaders such as Rep. Paul D. Ryan (R-Wis.) to block-grant Medicaid funding.

According to the report, 255,000 people face catastrophic out-of-pocket costs in a typical year in states that haven't expanded Medicaid.

During a July 2 press briefing, White House Press Secretary Josh Earnest said the decision to expand Medicaid should be simple.

The governors in the 24 state legislatures that have blocked Medicaid expansion “face a central consequential decision. They can either score short-term political points by continuing to attack the Affordable Care Act and block the expansion of Medicaid, or they can boost their state's economy, save their state's taxpayers money, and ensure that thousands of their citizens have access to quality, affordable health care,” Earnest said.

Emphasis on Coverage Gap

Elizabeth Carpenter, a director at the consulting firm Avalere Health, told Bloomberg BNA July 2 that the report signals a shift in the administration's attempts to enforce the ACA.

Instead of putting emphasis on the states' decisions to run the insurance exchanges, the report “foreshadows an increasing drumbeat to force states to expand Medicaid.”  
--Elizabeth Carpenter, Avalere Health

Instead of putting emphasis on the states' decisions to run the insurance exchanges, the report “foreshadows an increasing drumbeat to force states to expand Medicaid,” Carpenter said.

According to Carpenter, the exchanges have proven successful at enrolling people, whether they were run by the states or by the federal government. The White House now wants to fill in the coverage gaps, so there is an increased urgency to get states to expand Medicaid, she said.

Groups Support Report

The American Cancer Society Cancer Action Network (ACS CAN), a patient advocacy group, praised the report in a statement, saying states that don't expand Medicaid “are missing a tremendous opportunity to reduce the health and economic burden of chronic diseases.”

Chris Hansen, president of the ACS CAN, in the statement said “the intransigence of elected officials in these states is jeopardizing the health and well-being of people” whose employers don't offer health coverage, who lost their jobs in the struggling economy or who have been diagnosed with a serious illness that prevents them from working full time.

“The debate over whether to increase access to health care through Medicaid isn't about politics, it's about people's lives,” Hansen said. “States should accept available federal funds to increase access to affordable, quality health coverage for their most vulnerable people. It's the moral thing to do.”

A safety-net hospital group also expressed support for the report's findings. Bruce Siegel, president and chief executive officer of America's Essential Hospitals, said essential hospitals have helped enroll the 5.2 million people who have gained Medicaid or Children's Health Insurance Program coverage in expansion states.

Siegel said a significant number of uninsured will remain in expansion states, and essential hospitals in both expansion and non-expansion states will continue to care for the bulk of these patients. “It is imperative that financial support for essential hospitals is maintained so they can continue to care for these vulnerable populations,” he said.

Americans United for Change said it e-mailed a copy of the report to all 24 Republican governors who haven't expanded Medicaid.

“This report adds to the mountain of evidence that Medicaid expansion makes for both a healthier population and a healthier economy--and that Republicans who refuse these resources are putting lives and jobs at risk,” Brad Woodhouse, the group's president, said in a statement. “An ounce of prevention is worth a pound of cure, and this report finds that but for GOP obstruction, hundreds of thousands more people would be getting recommended preventive screening that would save lives and bend down the health cost curve.”

Other Expansion Efforts

The report comes as a number of Republican governors are seeking to use their own state-specific plans for providing coverage for low-income individuals while still receiving federal funds for Medicaid expansion.

The administration of Indiana Gov. Mike Pence (R) July 1 asked the federal government for permission to expand its consumer-driven version of Medicaid to reach 350,000 uninsured people (see related story).

In 2013, Arkansas was the first state to gain approval from the Department of Health and Human Services to place new Medicaid enrollees into private plans on its insurance marketplace, which it operates in partnership with the federal government .

Matt Salo, executive director of the National Association of Medicaid Directors, said it is important for the administration and states to come to an agreement on a “middle road” to Medicaid expansion. Aside from some new data points, the report doesn't add much substance to what the administration has been saying for the past two years, Salo said.

If the administration signs off on Indiana's plan, as it did with Arkansas and Michigan, it can show there is a middle path, despite the politics of the issue, Salo said.


To contact the reporter on this story: Nathaniel Weixel in Washington at nweixel@bna.com

To contact the editor responsible for this story: Nancy Simmons at nsimmons@bna.com

The report is at http://www.whitehouse.gov/sites/default/files/docs/missed_opportunities_medicaid.pdf.