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Repealing Medicaid Expansion Would Take Health Coverage from Millions, Strain State Budgets

January 4, 2017 at 9:30 AM

Repealing the Medicaid expansion under health reform, as congressional Republicans plan to do in the coming weeks, would cause millions of low-income Americans who have newly gained coverage to become uninsured — including many who are now receiving treatment for critical health conditions such as cancer, diabetes, and drug addiction. And the billions in lost federal dollars would strain state budgets, cause rural hospitals to close, and drive up the amount of uncompensated care doctors and hospitals provide.

As I explain in a recent paper, here’s what’s at stake if Congress repeals the Affordable Care Act’s (ACA) Medicaid expansion:

  • Millions of Americans would lose their health coverage. The nation’s historic gains in coverage since health reform’s major coverage provisions took effect in 2014 have been greatest in the 31 states (plus the District of Columbia) that have expanded Medicaid. Repealing the expansion would cause 11 million people to lose coverage.
  • States would lose critical federal resources to fight the opioid epidemic. The Medicaid expansion helps ensure that people dealing with substance abuse disorders have health coverage and access to needed services. For example, Ohio estimates that over half of its Medicaid expansion enrollees have used their coverage to access mental health and drug treatment services. And in Kentucky treatment for substance use has risen by 740 percent among the expansion population.
  • State budgets would be strained. The Medicaid expansion has produced large net savings for many states. If the expansion is repealed, the burden for providing care to low-income residents would move from the federal government back to states and, as a result, states would find it harder to fund non-health priorities such as education and infrastructure.
  • More rural hospitals would likely close. Rural hospitals in expansion states have fared better than those in non-expansion states in recent years. Repealing the expansion would likely accelerate rural hospital closures across the country.
  • Uncompensated care would rise. As coverage expanded under health reform, the amount of uncompensated care that hospitals provide fell, and much more so in Medicaid expansion states. If the ACA is repealed, the uninsured will seek $88 billion more in uncompensated care in 2019, Urban Institute researchers project.