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Damages from Medicaid Politics Won't Stop at Hospitals

John Commins, for HealthLeaders Media, July 3, 2013

Try to imagine the ripple effect of punching a $4 billion hole in the economy of a state whose lawmakers refuse federal Medicaid subsidies. It's not just hospital jobs that will disappear. Ancillary support jobs in healthcare and other businesses will wither, too.

Despite the nasty rhetoric, it seemed illogical that 14 states would reject billions of dollars in federal subsidies to pay for the expansion of Medicaid just to make a political point. There was a sense that political leaders in these recalcitrant states were bluffing to save face, but would eventually find a way to expand the program when they realized what they were giving up and who they were hurting.

Wrong!

And now that most state legislatures across the nation have adjourned for the summer with no intention of returning until next year, this is the reality we're left with at least for the next year or so.

A recent RAND study in Health Affairs estimates that the decision not to expand Medicaid in 14 states means that 3.6 million fewer lives will be covered, federal "transfers" to those states will drop by $8.4 billion, and those states' spending for uncompensated care will increase by $1 billion in 2016.

It would be easy enough to write off the decision to reject Medicaid money as just plain dumb. Unfortunately, it's more complicated than that because innocent people are going to be hurt by this ideological line toed in the sand by lawmakers who really ought to know better.

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