Why Do Rick Perry and Rick Scott (and Several Other Governors) Want to Walk Away From Free Money?

Imagine you are in the audience for the Oprah show with 49 other people. (Ok, I know it’s off the air, but bear with me on this). Oprah announces she is giving everyone in the audience a car. Not only that, but she will pay for all expenses related to the car—insurance, gas, maintenance—for three years. After that, you just need to pay for gas; she will still cover at least 90 percent of the costs into the foreseeable future. All you have to do is promise to give rides to people who don’t have cars.

 Would you turn down the car?

 Well, that’s exactly what several state governors, including those in Florida and Texas, say they will do—turn down federal funding to expand Medicaid eligibility in their states. The Medicaid expansion is part of the Affordable Care Act (ACA). It calls for states to expand coverage to most adults with incomes up to 133% of the federal poverty level (now $15,000 for a single person and $31,000 for a family of four). The federal government will cover the full cost for these additional beneficiaries for the first three years, gradually reducing its share to 90 percent by 2020. You can dig down into the details if you want at the Kaiser Family Foundation.

Compare that to current Medicaid shared levels, in which the federal government pays about half of what states spend. The ACA stated that if states don’t expand Medicaid, they will lose all federal funding for the program.

It’s that last sentence that got to the Supreme Court, which declared that this provision was unconstitutional. Ok, I can live with that. What I can’t live with and don’t understand is why any state would turn down this nearly free opportunity to cover thousands, possibly millions, of uninsured individuals in their states.

Turns out that hospitals in these recalcitrant states are also pretty pissed. They agreed to significant cuts in Medicaid reimbursement because they would get millions of new patients, which would help them, in turn,  more than cover their losses, as The New York Times explains.

I’ve got my fingers crossed that this will convince the governors to back down.

Otherwise, I guess they’ll be taking the bus.

PS: Great article here on 10 things you never knew about the Affordable Care Act.

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