Shrinking state revenues follow Medicaid expansions

Wednesday, August 14, 2019
Chris Woodward (

cash 100-dollar billMore than a dozen states have yet to cooperate with the federal government to expand the Medicaid program and an expert of the federal insurance program says they are wise to stay away. 

The stated purpose for the Medicaid expansion is to help more low-income Americans get health insurance coverage and expansion was mandatory for states as part of the controversial Affordable Care Act passed by a Democrat-led Congress in 2010.

The mandatory expansion proved controversial, too, and states sued and won a U.S. Supreme Court case that freed them from being forced to accept it.  

Almost 20 years later, the federal government is no longer covering the full cost of expansion. According to the Center on Budget and Policy Priorities (CBPP), the federal share dropped to 95 percent in 2017, 94 percent in 2018, and 93 percent in 2019.


Starting in just five months, at the first of 2020, participating states will begin paying 10 percent of the cost, says Nicholas Horton of The Foundation for Government Accountability

"You hear about free money, and you hear about all these billions of dollars that are out there,” he says. "And we should take them and use them because we're going to be missing out. It was never free money to begin with but it's definitely not free money now."

Funding for Medicaid expansion, in fact, has always been a concern for politicians, think tanks, and special interest groups concerned about the cost.

Horton points to Mississippi, one of the poorest states in the nation, as one example.

"If Mississippi, for example, were to expand Medicaid,” he warns, “Mississippi taxpayers are going to be paying in hundreds of millions of dollars right away to give non-disabled, working-age adults Medicaid welfare benefits."

The Clarion-Ledger newspaper reported earlier this year that approximately one-quarter of Mississippians are enrolled in Medicaid and an expansion would cover approximately 100,000 more.

Missing from the story: the estimated cost.

According to Horton, he is not praising an unusual Medicaid expansion in his home state of Arkansas, where lawmakers voted in 2013 to create a sort of hybrid Medicaid expansion.

"We are hiring" signArkansas uses federal Medicaid funds to buy private insurance for residents who are up to 133 percent of the poverty line. The insurance is purchased through the health insurance exchange created by Obamacare.

"The way we did it was twice as expensive as the way other states have done it," Horton tells OneNewsNow. “So I would just say don't follow Arkansas if you're looking for answers on Medicaid and Medicaid expansion."

Arkansas did put work requirements in place for able-bodied adults in Medicaid, which he supports, because it makes sure they have a way up and out of the program by working a job.


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