If your state chooses not to expand Medicaid…you get to pay anyway.

Bill Daley is the Federal Issues Policy Director at The Alliance for a Just Society.

The surprising ruling by the Supreme Court on the Affordable Care Act has tempted a spate of Governors to suggest that their states will not participate in the expansion of Medicaid.

This all relates to the Congressional decision to undergird new private health insurance market reforms with a solid public program for those with very low incomes. Under the ACA the Medicaid program is to be expanded to include most consumers under 133% of the federal poverty rate. This expansion is paid for 100% by the federal government for the first three years and then the states are to begin to pay for a maximum of 10% of the cost. This 90% matching ratio is considerably more than most states currently receive for their Medicaid patients.

No matter. These Governors are in the throes of a partisan frenzy over the approval of the ACA by the Court. They are seeking some way, any way to undermine the only plan we have in place for the improvement the health care system.

But here’s the interesting news. If your state does not participate in the Medicaid expansion you get to pay anyway. Yep. Here comes that old “cost shifting” problem again.

Here’s how it works. The low-income family remains uninsured. They cannot get into the new exchanges because they cannot afford to and they are not eligible for the new subsidies. They are going to be uninsured and they are going to get the most expensive and least effective health care – the hospital emergency room.

All the benefits of prevention and primary care that would accompany an expansion of Medicaid will be lost. A principle tool for reducing the cost of health care will be lost. And the misery will continue for millions.

What will happen to the hospitals? Many hospitals rely on a program called Disproportionate Share Hospitals (DSH) to mitigate the impact of the uninsured. Because of the expansion of Medicaid, he DSH program is slated to disappear. So, no Medicaid expansion and no DSH. Hospital prices are sure to rise and we all will have to pay.

Here’s another consequence that really exposes the moral issue. Many of those who are to be insured under the Medicaid expansion are people of color. Their health outcomes already are disproportionately poor. One of the opportunities that the ACA provides is to get on the offensive against this scandalous circumstance.

Advocates already are fighting to prevent a deterioration of the Medicaid program as recession induced poverty pushes up the demand while pushing down state revenues. We will have to gird for this battle a while longer. We will need to be particularly vigilant in states where the Governor and the Legislature will advance purely partisan motives to turn their backs on the poor.



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