White House: Red States Have Saved Federal Taxpayers $88 Billion By Rejecting Medicaid Expansion

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The 24 states that haven’t expanded Medicaid through Obamacare yet have saved federal taxpayers $88 billion through 2017, according to a White House Council of Economic Advisers report released Wednesday. 

Half of the states across the country have faced bitter fights over expanding Medicaid, which would stick federal taxpayers with tens of billions in costs over the next decade. The Obama administration is attempting to sell the expansion to states under the guise that the state governments won’t have to charge state taxpayers for the expanded program until 2020, when states become responsible for 10 percent of the costs (absent any more changes to the health care law, of course).

The White House office attempted to shame states that have held out against the health care law’s Medicaid expansion, but ended up focusing on how much taxpayer funding the remaining states have saved federal residents nationwide.

“If the 24 States that have not yet expanded Medicaid had done so as of January 1, those States and their citizens would have received an additional $88 billion in Federal support through calendar year 2016,” the report concluded. The 26 states and the District of Columbia that have already accepted the expansion will spend $84 billion of federal taxpayer money by 2016. 

The White House touted the number of government jobs the expansion could create by 2016 if the states give in — absent any acknowledgement of the downside of another $88 billion in government spending.

“If the 24 States that have not yet expanded Medicaid had done so as of January 1, they would have boosted employment by 85,000 jobs in 2014,” the White House argued. Had all those states done so, the report claims, “they would have created an additional $66 billion in total economic activity through 2017.” The 26 states and D.C. that already expanded Medicaid are expected to “create” $62 billion in total economic activity through 2017 due to the federal taxpayer funding.

But even the White House’s rosy projections leave taxpayers at a serious disadvantage. If every state gave in and expanded Medicaid and the White House is correct that total economic activity would be upped by $66 billion over the next three years — taxpayers would have paid out $22 billion more for their efforts.

Whether taxpayers believe providing Medicaid to a wider swath of the population is worth the extra billions. Medicaid coverage is notoriously low-quality — the program typically offers the lowest physician reimbursement rates and studies show that it’s difficult for participants to find a doctor who will accept the coverage. (RELATED: Study: Doctors Say No To Medicaid)

A February study found that in the nation’s largest cities, “many if not most physicians…are not accepting Medicaid as a form of payment.” It’s not surprising that with little access to many doctors, Medicaid patients often seek regular care in emergency rooms — something Obamacare was supposed to guard against.

It’s no surprise, then, that the latest studies have found that those on Medicaid don’t have better health outcomes than those that went uninsured. A two year-long study of Oregon’s Medicaid program, which boasts higher physician reimbursement rates than many other states, found that Medicaid “generated no significant improvement in measured physical health outcomes,” Forbes reported in May.

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