Study: Medicaid refusal will cost states billions

The states that are declining to participate in the Medicaid expansion under ObamaCare are foregoing billions of federal dollars over the next 10 years and leaving their taxpayers holding the bag, according to a new study.

The study, by The Commonwealth Fund, which supports the healthcare law, found that the 25 states that have either declined to participate or remain undecided on the expansion are foregoing more than $40 billion in federal largesse.

Because the Medicaid expansion is raised through federal taxes, the program will be paid for by residents in all states, even those that are not participating.

Texas will forgo about $9.2 billion through 2022, the study found, followed by Florida at $5 billion, Virginia and Georgia at $2.8 billion each, and North Carolina at $2.6 billion.

Of the five states that have yet to decide whether they’ll participate, Tennessee and Indiana would be giving up the most, foregoing $2.1 billion and $2 billion respectively.

“States often seek to increase their share of federal funds, lobbying for military bases, procurement contracts, and highway funds,” the study reads. “Federal funding provides direct benefits and bolsters local economies. The opportunity to participate in the Medicaid expansion has potentially important benefits to states.”

States that have turned down the federal money will continue to have to pay for “uncompensated care costs,” like expensive emergency room visits by those who may otherwise have been covered under Medicaid.

The Medicaid expansion has been one of the few bright spots for ObamaCare so far. The Centers for Medicare and Medicaid Services (CMS) announced Tuesday that Medicaid applications have jumped more than 15 percent over prior months in states that chose to expand the program.

More than 1.46 million people were determined eligible for Medicaid or the Children's Health Insurance Program through state-based agencies and marketplaces in October, the agency said.

Twenty-five states and the District of Columbia have so far opted into the expanded Medicaid program. But the other 25 states, mostly run by Republican governors or legislatures, have said they would not move forward on the expansion at this time.

Many conservative lawmakers facing reelection or seeking higher office fear there will be blowback from Republican voters if they accept federal dollars associated with President Obama’s healthcare law. Some conservative governors also argue that the expansion would sink their state budgets.

Democrats have painted governors in those states as unwilling to offer cheap healthcare coverage to low-income residents, noting that the expansion is mostly federally funded.

Under the Affordable Care Act, the federal government will pay the full cost for a Medicaid expansion for those earning less than 138 percent of the federal poverty level for three years. That drops to 90 percent in the fourth year, requiring the states to pick up the additional 10 percent.

The Supreme Court ruled last year that the federal government couldn’t force states to participate in the expansion.