By skyforbes 
Medicaid in its original conception and in its current formulation under the Affordable Care Act is an example of government solving a problem because individuals can’t. The problem solved is the inability to acquire and use healthcare services and the resulting economic burden on the individual, the healthcare system and the government.
One myth floating around is that Medicaid expansion under the Affordable Care Act is too expensive for states to accept. The arguments against expanding Medicaid include not trusting the federal government to continue to provide financial support, resentment about providing healthcare to single, poor Americans and concerns about unemployment increasing.
Recent research from organizations like the Kaiser Family Foundation suggests that the Medicaid expansion has been an economic success and will continue to be after the federal government reduces its subsidy by 10% beginning in 2017.
As of 2014, 80 million low-income Americans were covered by Medicaid, 48% of whom were children. Medicaid provides coverage to poor and low-income Americans at 133% of the federal poverty line ($25,951 for a family of 3). Among groups not eligible for Medicaid prior to passage of the Affordable Care Act were childless adults — not pregnant, not disabled and not elderly — no matter whether their income met the criteria. In addition, legal immigrants are barred from receiving aid for the first five years in the US, regardless if they met the eligibility requirements.
Since its creation in 1965, the Medicaid program has been jointly funded by the federal government and individual states. The federal government provides the states with funds (Federal Medical Assistance Percentage (FMAP)) that cover a percentage of program expenses and the level of funding varies by state based on per capita income. The states then make up the rest of the funding. States typically fund local hospitals and clinics so they can provide charity care, mental health and substance abuse services. Despite its limitations, Medicaid has been hugely successful in securing healthcare for low-income families and children. Moreover, both infant mortality and the incidence of low birth weight have been reduced for women on Medicaid.
Another important and overlooked aspect of Medicaid availability is that it reduces the level of uncompensated care incurred by the healthcare system that is paid for out of state funds. Hospitals by law cannot turn away patients who cannot pay for their care and thus find themselves treating patients who have no means to pay. The hospitals are only partially compensated by states for this service and are saddled with debt that is near impossible to discharge. Medicaid coverage for low-income families means less uncompensated care at healthcare institutions.
The Affordable Care Act included a provision to provide coverage to poor and low-income Americans at 138% of the federal poverty line ($26,951 for a family of 3). The federal government will pay 100% of the costs associated with these newly eligible enrollees until 2017 and will pay 90% of the costs in perpetuity. The newly eligible population includes children and childless adults. So, for the first time, poor, low-wage single Americans have access to healthcare. The critics have been vocal in their opposition to this aspect of the ACA and, in particular, covering single adults suggesting that providing medical care creates dependency on government handouts and reliance on “free stuff”.
A close look at the data shows, however, that states benefit from Medicaid expansion in myriad ways. The four main areas where Medicaid expansion has had the biggest impact is in reducing the healthcare costs of uninsured people, reducing mental health costs at the state and local level, job growth and worker health. Reports from a variety of sources, governmental and private, clearly show a positive impact of employment and revenues for states that expanded Medicaid.
Medicaid coverage itself reduces uncompensated care and when data from all states are analyzed, there was a reduction of $7.4 billion in these costs in 2014 compared to 2013. The difference between the states that have expanded Medicaid and have not is quite striking. States with expanded Medicaid have lowered their uncompensated costs by $5.0 billion while states that have not reduced these costs by only $2.4 billion over the same time period. For example, as a result of expanding Medicaid under the Affordable Care Act, Harborview Medical Center in Seattle reports their uninsured population dropped from 12% to 2% of their overall population and they experienced a $20 million increase in revenues in 2014. Recent studies suggest states that have expanded either full or limited Medicaid benefits prior to the ACA will see a $66 billion savings through 2019 from enhanced federal funding for these groups.
Medicaid expansion has enabled states to free up monies currently spent on subsidizing charity care, mental health and substance abuse services that they covered for uninsured individuals. Because people with mental health needs are now covered, Medicaid now reimburses states for services they otherwise would have provided. Studies show states will likely save up to $20–40 billion through 2019 as Medicaid replaces state funding. Furthermore, states that have expanded Medicaid have also been able to cut their mental health funding $4.6 billion from 2009–2012 levels because of federal funding for these patients.
Data from the labor department clearly demonstrates an economic advantage to states that have expanded Medicaid. Analyzing data from December 2013- December 2014 revealed states that expanded Medicaid saw job growth in the healthcare and social service sectors by 2.4% compared to 1.8% in non-expansion states. Kentucky in particular reported a net positive impact on their state budget of $919.1 million and 12,000 additional jobs in 2014 and anticipates 40,000 new jobs created 2014–2020. Several state-level studies have shown tens of thousands of jobs created through Medicaid Expansion, estimates include 26,000 jobs in Virginia and 24,000 in Missouri in 2014 alone.
Medicaid expansion has also shown to have a positive impact on the workforce. Employers spend on average $33 billion/year on lost work and productivity due to depression. A study from Oregon shows that Medicaid patients are more likely to be diagnosed and treated for depression and diabetes compared to uncovered patients thus reducing absenteeism and improving worker productivity.
Looking at the numbers, Medicaid expansion appears to be a success story despite the pronouncements of state officials opposed to the provision. The moral question that needs to be asked is why are states reluctant to extend healthcare services to those in need? Is it because it is perceived as “free stuff”? Is it because poor, low wage workers are somehow morally culpable for their situation and don’t deserve help? Until we are willing to face these questions head on, we will continue to squander an opportunity to improve the clinical and economic health of our nation.