The 20 states that did not expand Medicaid under the Affordable Care Act help pay for the expanded Medicaid program in other states. This is the conclusion from a study completed by Sherry Glied and Stephanie Ma of New York University’s Wagner Graduate School of Public Service who calculated the net cost to taxpayers in states turning down the Obamacare Medicaid expansion.
Texas, Florida, Georgia, and Virginia are the biggest losers because they are forgoing billions of dollars in federal funds, while residents in their states are contributing to the cost of the expansions in other states.
Federal funds that pay for state Medicaid programs are raised through federal general revenue collection – taxes paid by residents in all states – whether or not they participate in the program. Therefore, taxpayers in states not participating in the Medicaid expansion will bear a share of the overall cost for Medicaid, without benefiting from the expanded program in the 20 states. Glied and Ma estimated the net loss of federal funds to states that do not expand Medicaid by using projected federal Medicaid spending in each state and calculating the federal Medicaid-related taxes paid by each state.
The expansion of Medicaid, which became voluntary for states after the Supreme Court’s 2012 ruling, is mostly financed by the federal government, which pays 100 percent of the total costs through 2016. The federal contribution will decline from 100 percent to 90 percent by 2020, and stay at 90 percent after that, Glied and Ma said.
After taking into account federal taxes paid by state residents, states with the highest net losses include Texas, which will see a net loss of $9.2 billion in 2022; Florida, which will lose $5 billion; Georgia, which will lose $2.9 billion and Virginia will lose $2.8 billion, the study said.