House GOP Budget Would Cost States Ten Times More Than Expanding Medicaid | ThinkProgress.

ss on Sep 13, 2012 at 5:00 pm

One aspect of the Affordable Care Act still in contention is the law’s expansion of Medicaid — the health care program for the disabled, seniors, and low-income Americans that’s jointly funded by the federal government and the states. The Supreme Court’s ruling on health care reform back in June determined that states could chose to opt out of the expansion without losing the federal Medicaid dollars they already recieve. Several governors — all of them Republicans — have already taken the opportunity to declare their state will not participate in the program’s expansion.

These refusals are often justified on budgetary grounds: Medicaid’s burden “increasingly shifts to Florida taxpayers in future years” and was “growing three and a half times as fast as Florida’s general revenue” as Governor Rick Scott put it. Georgia Governor Nathan Deal said of the expansion, “I think that is something our state cannot afford.” And Rick Perry, the ever blunt governor of Texas, declared, “I will not be party to… bankrupting my state.”

Ironically, however, a recent analysis by the Center on Budget and Policy Priorities determined that the budget Paul Ryan engineered in the House — which was passed by the governors’ own party, and endorsed by Rick Perry and the other leaders of the Republican Governors Association — would cost states’ budgets well over ten times as much as the ACA’s Medicaid expansion.

The CBPP determined that between now and 2022 the Medicaid expansion would cost states $73 billion. Over that same time period, the House GOP budget would cut $810 billion from the federal government’s contribution to Medicaid, on top of its repeal of the ACA’s Medicaid expansion. The budget would also cut another $281 billion from federal support for schools and other state and local services. A grand total of $1.091 trillion in losses to state budgets.

In fairness to the governors, the Urban Institute ran the numbers and found that the cost of expanding Medicaid would not fall evenly on the states. (It should be noted their estimates only run through 2019.) And the majority of the states either refusing, or leaning towards refusing the expansion, have populations with unusually high portions of people that are currently uninsured but would be eligible to join Medicaid.

But even under the Urban Institute’s worst-case predictions, several of the refusing or leaning-towards-refusal states still see net savings from the new federal dollars that come with the expansion. And for those that still see net costs, such as Texas and Florida, the highest predicted budgetary hit was in the vicinity $2.5 billion. Almost certainly, that comes no where close to matching the damage that would be done if the House GOP’s budget became law.

Meanwhile, the number of uninsured Americans fell by 1.3 million in 2011 — the first time it’s gone down in four years. In no small part, the decrease was due to a boost in Medicaid and CHIP funding included in the 2009 stimulus. If all the states carry through with the far greater boost the ACA’s expansion would bring to Medicaid, as many as 17 million currently uninsured Americans could finally gain coverage.
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