Cost of a state’s Obamacare opt-out

States can opt out of Medicaid expansion.
And lose big bucks doing so.

How do we predict the effects of Obamacare on the average American family? There may be general agreement that the young and healthy will subsidize the unhealthy, the old, and the poor. But for overall estimates, there are too many unknowns. All I can find are eye-of-the-beholder projections.

There is, of course, the cost to taxpayers of the House devoting 15% of its legislative time to 37 repeal votes. But a serious cost seems to be states shooting themselves in the fiscal foot. Refusing to expand Medicaid, which the Supreme Court has allowed, could cost taxpayers billions in 14 states.

Declining to expand medicaid will cost states a lot

The Rand Corporation has analyzed how opting out of Medicaid expansion would affect healthcare coverage and spending.

"With fourteen states opting out, we estimate that 3.6 million fewer people would be insured, federal transfer payments to those states could fall by $8.4 billion, and state spending on uncompensated care could increase by $1 billion in 2016, compared to what would be expected if all states participated in the expansion. . . We conclude that in terms of coverage, cost, and federal payments, states would do best to expand Medicaid."

I think it's too early for our free Where-To-Live Reports to reflect these tax costs and healthcare reductions on neighborhoods across the country. If the opt-out costs are so pricy, some states will opt back in before long.

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