WASHINGTON – States will receive more than $9 in federal money for every $1 they spend to cover low-income residents under President Obama’s health care law, according to a nonpartisan analysis released Monday.
Expanding Medicaid to cover about 20 million more low-income people will cost over $1 trillion nationally from 2013 to 2022, said the joint report from the Kaiser Family Foundation and the Urban Institute.
But the analysis found that states will pay just $76 billion of that, a combined share of roughly 7 percent. The federal government will pay the other $952 billion.
Republican governors have resisted the Medicaid expansion, saying it adds an unacceptable burden to already strained budgets.
And the Supreme Court handed the governors a victory this summer, ruling that states are free to reject the Medicaid deal.
Medicaid is one of the two main ways that Obama’s law expands coverage to most of the 50 million uninsured U.S. residents. As a broader Medicaid safety net picks up more low-income people, new health insurance markets called exchanges will offer subsidized private coverage to the middle class. Both parts of the strategy take effect in 2014, at the same time that most Americans will be required to carry health insurance or pay a fine.
The new analysis was unlikely to change the minds of state leaders who have already rejected the Medicaid expansion, but it may help shape the debate in a majority of states still on the fence.
Among those refusing are Texas Gov. Rick Perry, South Carolina Gov. Nikki Haley, and Louisiana Gov. Bobby Jindal.For most others, the choice will come into sharp focus early next year as state legislatures meet.
Under the law, Medicaid will be expanded to cover people up to 138 percent of the federal poverty line, or about $15,400 for an individual.
It’s mainly geared to low-income adults with no children at home, who currently cannot get Medicaid coverage in most states. Washington pays all of the cost for the first three years, gradually phasing down to 90 percent.
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