Under the U.S. Senate’s Better Care Reconciliation Act, the 19 states that did not expand Medicaid under the Affordable Care Act will forego $737 billion in net federal Medicaid outlays throughout a decade compared to states that have opted to expand the program. Researchers from the Hospital Industry Data Institute reviewed the U.S. Senate’s Better Care Reconciliation Act to identify how federal funds would flow to expansion and nonexpansion states. They found a continued significant imbalance in federal spending in expansion states even after accounting for the restoration of cuts included in the ACA and additional safety-net funds included in the BCRA.
“Missouri and the other 18 states that did not expand Medicaid are asking for Congress to address the issue of fundamental fairness,” said Herb B. Kuhn, Missouri Hospital Association President and CEO. “The BCRA fails to improve the broad inequity in the U.S. House’s earlier bill, the American Health Care Act. Since the Senate has paused to redraft the legislation, we’re asking that they coolly and systematically address the Medicaid inequity embedded in the AHCA and first version of the BCRA — which widened, rather than closed, the equity gap.”
On a per capita basis, net federal expenditures for full-expansion states increased 91 percent between 2013 and 2015, while partial-expansion states — those with Section 1115 waivers — experienced 71 percent growth. The 19 states that did not expand Medicaid under the ACA experienced a 13 percent increase. Combined, in 2015, Medicaid expansion states received $1,578 per capita in federal Medicaid spending compared to $753 per capita in nonexpansion states — a relative difference of 110 percent.
States that did not adopt Medicaid expansion start at a disadvantage and remain disadvantaged when the major provisions of the BCRA are enacted in 2020 and beyond. The per capita federal spending for expansion states is projected to slow between 2016 and 2019, and experience a greater reduction between 2020 and 2021. However, by 2026, the nonexpansion states are projected to receive $1,192 per capita, while expansion states would receive $1,987 per capita under the BCRA—a difference of 67 percent.
“States that didn’t expand are already disadvantaged because they have forgone billions in federal health care dollars to their citizens and increased financial stability for their health care systems,” Kuhn said. “The BCRA’s imbalance in long term investments will create haves and have-not states. The legislation recognizes this inequity, but falls far short of closing the gap. The Senate should address this issue, and other issues within the legislation, before attempting to move it forward.”
The research was released jointly by the Missouri Hospital Association and Texas Hospital Association.