Pro-con: Should states join expansion of Medicaid?

The facts on the ground make clear that states would be wise to expand Medicaid as part of the Affordable Care Act. First, states will be required to pick up very little of the tab. The federal government will pay for 100 percent of the cost of states’ Medicaid expansions through 2016. The federal contribution will start to decline gradually beginning in 2017, and states will be required to pay for 10 percent of the cost of the expansion in 2020 and beyond. The Center on Budget and Policy Priorities estimates that as a result of these federal subsidies, states’ Medicaid expansions will increase their expenditures on Medicaid by only 2.8 percent between 2014 and 2022. Second, by expanding Medicaid coverage, states will be able to reduce their spending on uninsured individuals through programs other than Medicaid. Recent estimates show that state and local governments cover nearly 20 percent of the cost of uncompensated hospital care and nearly 45 percent of the cost of mental health services provided to low-income and uninsured individuals. The third rationale for expanding state Medicaid programs is perhaps the most compelling: Expanded health coverage will help millions of low-income Americans to lead healthier, more productive lives. – Adam Thomas, Georgetown Public Policy Institute

States are already struggling to pay their Medicaid bills. Why put taxpayers on the hook to pay even more? Medicaid is the single biggest item in state budgets today. It consumes, on average, 23 percent of state dollars spent, pinching funds for other high-priority functions such as education, transportation and emergency services. Yet expanding Medicaid was a central tenet of the Affordable Care Act. It required states to open their program to all individuals earning less than 138 percent of the federal poverty level. The goal was to reduce the number of uninsured – by dumping 17 million Americans onto the Medicaid rolls. Many state officials are leery of federal promises to pay program costs in perpetuity. Such skepticism is warranted. Medicaid is a troubled program than can’t be sustained in its current form, much less on the grander scale envisioned by Obamacare advocates. What’s needed is not expansion but reform – a complete makeover of the program that gives the working poor access to private health insurance like the vast majority of Americans enjoy today and restores Medicaid to a true safety net to meet the needs of the most vulnerable in society. – Nina Owcharenko, Heritage Foundation