by Charles Blahous
e21: Economic Policies for the 21st Century
March 19, 2013
The bottom line is that Medicaid expansion brings additional federally-financed health benefits to the states while exposing state budgets to higher costs. It is reasonable for state governors to reach different conclusions as to which is the overriding factor. Perhaps the only common incentive clearly facing all states is to shift their childless adults above the Federal Poverty Level (FPL) from Medicaid to the ACA’s new health exchanges and to let the federal government absorb the full cost of their subsidies. Beyond that, much decision-making will depend on whether the states believe they can negotiate satisfactory terms to justify shouldering the costs of expansion, and on how states believe the troubled federal fiscal picture will ultimately be resolved.