The price of Medicaid expansion opt-outs: $53.3 billion

The price of Medicaid expansion opt-outs: $53.3 billion

The Supreme Court decided way back in June that the health law’s expansion of Medicaid was optional rather than required. That decision, it appears, comes with a hefty price tag: $53.3 billion.

The National Association of Public Hospitals estimates that, in light of the decision, the United States will spend as much as $53.3 billion more on bills that go unpaid by the uninsured. Their analysis uses data from the Congressional Budget Office, which estimates that six million to10 million fewer Americans will gain insurance through Medicaid after the Supreme Court decision.

“Congress certainly didn’t foresee this level of uninsured and uncompensated care when it enacted the ACA,” says NAPH president Bruce Seigel.

Keep in mind, this isn’t necessarily $53.3 billion in new spending. It’s more like a cost shift. Those who would have had their bills paid by the federal government (under Medicaid) could now have the costs covered by local governments and hospitals, which tend to foot the bill for many of the health care services that go unpaid.

The Congressional Budget Office estimates that, over the course of a decade, states opting out of the Medicaid expansion – and not drawing down funds from Washington – will save the federal government $84 billion.

It’s also a cost shift to those with private insurance, as hospitals charge a bit more to clients with coverage to recoup their losses on the uninsured. One study estimated that cost shifting raises annual insurance premiums by as much as 1.7 percent, or $80 annually.

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