States That Won’t Expand Medicaid Would Have Gained the Most: Urban Institute Study

The Urban Institute and the Kaiser Commission on Medicaid and the Uninsured released a report on July 18, 2013, describing the effects on the number of uninsured, hospital reimbursement, and federal funding in the states that do not expand Medicaid pursuant to the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). The study updated previous analyses to reflect the most recent legislative actions.

As of mid-July 2013, 24 states have committed to expand Medicaid, and 21 have decided against it. The debate continues in six states—Indiana, Michigan, New Hampshire, Ohio, Pennsylvania, and Tennessee.

The Uninsured

Originally, it was projected that 13.1 million people who are currently uninsured would be covered by Medicaid under PPACA. Of those, about 4.8 million, or 36 percent, live in states that are expanding Medicaid; 6.3 million live in states that have refused expansion. In the six undecided states, 2.1 million people who are uninsured now would be eligible for Medicaid under expansion.

According to the study, 64 percent of the individuals who would be covered by Medicaid under expansion live in states that will not do so or are still debating. Texas, Florida, and Georgia alone account for half of the potential enrollees.

Growth in Enrollment and Federal Funds

The states that have not expanded or are still debating have had lower income limits than the expansion states. They would see both the biggest increases in Medicaid enrollment and the biggest influx of federal funds.

Other Economic Effects

Because PPACA reduces funding for Medicare and Medicaid disproportionate share hospital payments nationwide, the hospitals in states that do not expand Medicaid will lose that funding, but they will not receive Medicaid payment for serving the uninsured. States with uncompensated care programs will not see a drop in payment for those programs unless they expand Medicaid. The nonexpansion states also will miss the increased tax revenue resulting from the job growth that would accompany new coverage of the uninsured.