Apr 17 2014, 9:53pm CDT | by Forbes
President Obama was triumphant on Thursday.
After facing months of questions over whether the White House would hit its goal of 7 million Obamacare sign-ups, the president had the latest enrollment data in hand—and it was a bigger number than almost anyone expected.
“The number of Americans who’ve signed up for private insurance in the marketplaces has grown to 8 million people,” the president said, standing in the White House press briefing room. “This thing is working.”
But President Obama took his moment at the podium to take a shot at the governors that have said no to the Affordable Care Act’s Medicaid expansion. For one reason or another, 24 states are still sitting out. (See the map of states below.)
“You got 5 million people who could be having health insurance right now, at no cost to these states,” the president said. “That’s wrong.”
The White House simultaneously released a fact sheet arguing that 5.7 million people would not have health coverage in 2016 if those 24 states continue to sit out of the expansion.
“This does frustrate me,” the president added, arguing that the states “have chosen not to expand Medicaid for no other reason than political spite.”
Republican leaders say that’s not fair criticism, and have offered a range of policy and financial reasons why they’ve said no to Medicaid.
It wasn’t supposed to be this way, of course. The framers of Obamacare envisioned the Medicaid expansion as mandatory, and very few experts expected that the provision would be affected by the legal challenges to the ACA.
But ever since the Supreme Court’s surprise ruling in 2012 that the Medicaid expansion was optional, state leaders were pushed into making a call on whether they wanted the provision and its Obamacare dollars, or wanted to sit out for now.
Below, I’ve pasted our latest Daily Briefing chart of where the states stand—the 24 holdouts are generally across the South and the Midwest—and you can find a detailed state-by-state rundown here.
The state-by-state map of Medicaid expansion is the “most important ACA-related chart, in my view,” Austin Frakt posted on Twitter. (Frakt’s the co-editor-in-chief of the influential Incidental Economist blog and a New York Times contributor.)
Why’s that? Because the Medicaid expansion represents a crucial tool to achieve the law’s goal of coverage expansion, perhaps even more than Obamacare’s insurance exchanges. Notably, the Medicaid expansion was originally projected to help 16 million Americans—many of them too poor to shop on the marketplaces, and millions of them previously uninsured—obtain coverage by 2019; because of the states are still opting out, the CBO has cut back that projection to 12 million.
Somewhat paradoxically, covering more patients through Medicaid also was expected to be a factor in Obamacare’s ability to tamp down health spending; because Medicaid pays lower reimbursement rates than private insurance, hospitals and doctors that see more Medicaid-related volumes might be forced to cut their costs and run more efficiently.
The trickle-down effect on providers’ finances is notable, too. Some struggling hospitals in states like North Carolina and Georgia have blamed their bankruptcies on their state’s decision to opt of the Medicaid expansion, even as other Affordable Care Act-related cuts to reimbursement take effect.
It’s still unclear if those states’ decisions are really playing a role in the short-term, but my Advisory Board colleagues modeled out the long-term impact of a state refusing to expand Medicaid. They found that deciding to opt out of Medicaid would ultimately lead to a 2.5-percentage point reduction in the average hospital’s margins—a notable hit, given that a hospital’s margins are usually just a few points above zero to begin with.
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