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STUDY: States Rejecting Obamacare’s Medicaid Expansion Will Cost Taxpayers Billions

By Sy Mukherjee

"STUDY: States Rejecting Obamacare’s Medicaid Expansion Will Cost Taxpayers Billions"

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Texas, Florida, Georgia, and other GOP-led states rejecting Obamacare’s Medicaid expansion are costing their residents billions of dollars by making them pay taxes into a system from which they won’t benefit, according to a new study by the Commonwealth Fund.

Obamacare gives states general federal funding to expand their Medicaid programs to all residents making up to 138 percent of the Federal Poverty Level (FPL). According to the study, the funding designated for states accepting the expansion is so substantial that it will be, on average, more than double the amount that states currently receive for transportation funds.

But since Medicaid is financed through general tax revenue, all Americans — irrespective of whether or not they live in a state participating in the expansion — will pay into the system. Consequently, Texas residents will see over $9 billion flow out of their state in 2022 to help fund the expansion in states that accept it; Georgia taxpayers will lose out on nearly $3 billion; and Florida’s rejection of the expansion will cost residents over $5 billion:

medicaid expansion money lost chart

CREDIT: The Commonwealth Fund

The Medicaid expansion is fully funded by the federal government for the next three years. But even in 2022, when expansion states will have to begin footing 10 percent of the program’s bill, researchers estimate that those states’ costs will be less that a sixth of the amount they spend on a yearly basis to attract private businesses.

“Federal funding provides direct benefits and bolsters local economies. The opportunity to participate in the Medicaid expansion has potentially important benefits to states,” concluded the study authors. “Even states that do not value the health and health system benefits of expanding Medicaid may value the expansion as a source of funds that benefits the state economy.”

If all states expanded Medicaid, over 21 million of the poorest Americans would have access to basic health benefits by 2022.

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