Medicaid expansion would push nearly 6 million more people from private coverage to the public dole.
Medicaid expansion would push nearly 6 million more people from private coverage to the public dole.
T en years after its rollout, ten states continue to wisely avoid the Affordable Care Act’s Medicaid expansion. The Biden administration and progressive activists, from Texas and Wisconsin to Kansas and beyond, are pushing them to give in. Mississippi nearly expanded Medicaid last month. Alabama is studying the program’s expansion in other states. Florida may decide the question in a ballot initiative in 2026.
But while the pressure on these states is growing, the evidence is becoming clearer: Medicaid expansion is a disaster for taxpayers, hospitals, and, most of all, the truly needy.
Using the latest data from the Centers for Medicare and Medicaid Services, I looked at how Medicaid expansion would likely play out in the ten holdout states. Expansion works by offering Medicaid to anyone who makes up to 138 percent of the federal poverty line, including able-bodied adults, most of whom already have health insurance. But Medicaid expansion would push nearly 6 million people from private coverage to the public dole, much as it has already done to millions more in the other 40 states.
Taxpayers would be the obvious losers. Why should they cover health insurance for many people who, at the moment, already have coverage? They would be forking over billions of dollars at a time when the federal government is adding more than a trillion dollars a year to the national debt. The last thing states should do is unnecessarily deepen America’s fiscal hole.
Hospitals, meanwhile, would get crushed by Medicaid expansion. The public program pays medical providers barely 60 percent of what private insurance pays, which means that hospitals risk losing money on every new Medicaid patient. I estimate that if the ten holdout states adopt expansion and more people are pushed onto Medicaid, their hospitals will collectively lose a staggering $8 billion in the first year.
States that have adopted expansion have already lost roughly $12 billion more because of Medicaid shortfalls than they did in 2013, the year before expansion. I found that Louisiana’s Medicaid shortfalls have more than doubled to $513 million since the program’s expansion in the state, in 2016. Montana’s shortfalls have nearly doubled, while Maine’s Medicaid red ink has soared by more than 150 percent.
Do the holdout states really want to bring this crisis to their own hospitals? Hopefully not, especially since persistent red ink can force hospitals to close. Nearly 50 hospitals have closed in states that have expanded Medicaid, including more than a dozen in rural areas where medical care is often harder to find. Some hospitals have stayed open by asking states for more money, but that only doubles the harm to taxpayers. In those cases, not only are taxpayers paying for people who could otherwise get private coverage, they’re also paying for the hospitals’ losses that inevitably result from increased Medicaid coverage.
But the worst harm of all befalls the most vulnerable: the people whom Medicaid is supposed to help. When states expand the program, they force a much larger number of people to compete for the same medical care. That means longer wait times. Sure enough, with 40 states having expanded Medicaid coverage, nearly 700,000 people are now on waiting lists, and tens of thousands have died in expansion states while waiting for services. Longer waits can lead to worse health, which is fundamentally unjust for those who actually need Medicaid.
Why should someone who makes well below the federal poverty line be stuck in line for a government benefit behind someone who’s well above the federal poverty line? For that matter, why should someone who’s able to work get medical care intended for someone with severe physical or developmental disabilities? Such injustices are far more likely under Medicaid expansion for the simple reason that expansion isn’t targeted at those who need help.
The 40 states that have expanded Medicaid already struggle with these problems. That hasn’t stopped the Biden administration and Democratic activists from continuing to demand that the other ten states join the suffering. The temptation for those states is growing, but so is the reality that the Affordable Care Act’s signature policy has failed. Ten years later, taxpayers, hospitals, and the truly needy need states to keep rejecting Medicaid expansion — and even start rolling it back.