Observers who are puzzled by the large number of states who have rejected the Affordable Care Act’s optional (thanks to SCOTUS) Medicaid expansion often note it offers state governments an incredibly generous fiscal deal. According to new CBO estimates, it’s looking even better now, per this report from the Center on Budget and Policy Priorities by Edwin Park:
CBO now estimates that the federal government will, on average, pick up more than 95 percent of the total cost of the Medicaid expansion and other health reform-related costs in Medicaid and the Children’s Health Insurance Program (CHIP) over the next ten years (2015-2024).
States will spend only 1.6 percent more on Medicaid and CHIP due to health reform than they would have spent without health reform… That’s about one-third less than CBO projected in February. And the 1.6 percent figure is before counting the state savings that the Medicaid expansion will produce in state expenditures for services such as mental health and substance abuse treatment provided to the uninsured.
In the short-term, of course, the deal is even more generous, if that’s possible, since the feds are picking up 100% of the cost of the expansion over the first three years.
And this doesn’t factor in the waivers available from HHS to modify Medicaid in ways that either save states more money or at least scratch conservative policy itches in exchange for agreeing to the expansion. And BTW, there’s the little matter than expansion would provide health insurance for millions of people in the rejectionist states.
Will these new numbers matter? Maybe in states that are already leaning towards accepting the expansion. But in hard-core rejectionist country, especially in the South, all the talk about “fiscal responsibility” in connection with the Medicaid expansion is pretty much bunk. They oppose expanding Medicaid because they actually want to blow Medicaid up, and/or because they see no reason to do any favors for those people who might tend to benefit most. So evidence that the expansion might actually be neutral for state budgets and very positive for state economies (not to mention public health) won’t cut much ice. Meanness is priceless to an awful lot of southern conservatives these days.
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