States refusing to expand Medicaid will both refuse health care to poor residents and lose federal funding. Their actions will also result in large increases on uninsured unpaid medical bills.
The Rand Corporation recently did a study on the 14 states who have decided to refuse Obamacare due to the Medicaid expansion section of the new healthcare program. According to the study, by refusing the expansion, these states will deprive 3.6 million people of the opportunity to receive health care coverage. In addition, it will ultimately cost the states $1 billion in reimbursements that would have come from the federal government (based on ObamaCare guidelines). By not expanding, Rand Corp predicts these states will face higher spending on hospitalization to treat the uninsured as federal funding declines under the new laws.
Per Carter Price and Christine Eibner of the Rand Corp: “State policymakers should be aware that if they do not expand Medicaid, fewer people will have health insurance and state and local governments will have to bear higher costs for uncompensated care. We estimated states’ cost for expansions to be less than the reduction in their costs for uncompensated care.” If all of the states would expand, 16.2 million people that are currently not able to secure health care would be able to obtain it.
The new ACA reform laws chiefly provide federal financing for new medicaid beneficiaries, at the same time reducing the funds that go to the hospitals to cover patients that are not insured and are not able to pay their medical bills. Medicaid expansion portions cover adults with no children making $15,282 or less a year right now (133% of the federal poverty level). Under the current system, these same people would currently be unable to get insurance.
The AHA (American Hospital Association) endorses ObamaCare because the Obama Administration recently announced it would shield the hospitals in the states who do not accept the expansion for a few years. They are hoping that this will help minimize the negative impact to healthcare providers.
Currently, 22 states and the District of Columbia are planning to move forward with the expansion (state expansion for Medicaid is set to go through by the end of 2014.)