As Federal Medicaid Money Fades, How Are States Funding Expansion?
LePage refuses to grant lawmakers' and voters' wishes to make 70,000 more people (adults with incomes at or below 138 percent of the federal poverty level) eligible for Medicaid, the nation's government-run health insurance program. After he vetoed five expansion bills in five years, Medicaid advocates took the issue to voters, who sided with their state legislators.
Still, LePage resists.
The reason, he says, is money. The federal government will eventually pay only 90 percent of the costs of expanding Medicaid. The rest of the tab is on the state, and LePage says he "would go to jail before I put the state in red ink."
There is some disagreement about the cost of expansion. The state's
Lawmakers and expansion advocates have suggested ways to pay for expansion -- money from a one-time
While LePage's actions are extreme -- he has ignored two courts' rulings ordering him to file expansion paperwork -- other governors are starting to think about how they will fund their portion of Medicaid expansion now that they are picking up a bigger share of the financial responsibility. During the first couple years of Medicaid expansion, the federal government paid 100 percent of the costs. That funding started winding down in 2016 and will drop to 90 percent in 2020.
"It can't be avoided, and every state will be looking at this. States have different starting points [for how much it may cost them], but they also have a lot of options," says
Most of the 33 states that chose to expand use their general fund to make up the difference, but 13 states are either tapping into tax revenues for it, making hospitals help, or cutting other Medicaid costs to make room in the budget.
Faced with losing Medicaid benefits,
"I knew this was going to be the most important challenge the state was going to face from day one," Sununu said during the budget signing ceremony.
The decision to require Medicaid beneficiaries to work or volunteer is a controversial one, but "it is likely these requirements will save states money," says
A similarly controversial policy -- charging a premium for Medicaid -- is also being used by
Meanwhile, a handful of states --
In some states, the conversation about expansion costs is just starting. Rhode Island Democratic Gov.
While it's smart for states to budget, health policy experts say the cost of expansion will be relatively small in comparison to other Medicaid costs, such as prescription drugs.
"The population that is covered by Medicaid expansion tends to be less expensive than others [on Medicaid and Medicare]. Medicaid spending fluctuates with the economy, and there are other fluctuations beyond just the wind down of federal funds," says Sommers. "It is a real cost, but if you hear a politician say that Medicaid expansion alone is going to bust the budget, then that's just a political argument."
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