Michigan recently became the 25th state to sign up for Medicaid expansion so by my math, exactly on half of the states have signed onto the most controversial aspect of the Affordable Care Act or ACA.
The ACA allows states to expand Medicaid to 138% of the poverty line and the federal government will pick up the tab for the first three years, after that states are on the hook for 10% of the cost in their state. This means that taxpayers in all 50 states are paying for Medicaid expansion in 25 states for the next three years.
Many opponents of Medicaid expansion argue that the expansion will continue to grow the federal debt and is a poor use of tax dollars. The problem with this argument is the system we live in is already taxing someone for the care being provided to the uninsured. Currently the cost of care for the uninsured is being shifted to, and covered by, the insured.
We live in a society that requires providers to provide health care services to anyone who shows up at their door, regardless of ability to pay. The uncompensated and charitable care provided to the indigent isn’t free. The cost of the care gets passed along to those who pay for health care in the form of higher prices which creates higher insurance premiums.
The rising insurance premiums, increased co-pays and deductibles paid by employers and employees are a hidden tax. The problem with this cost shift is that it’s inefficient. The uninsured are forced to seek care in settings like the emergency department where care is expensive and they often wait as long as they can causing chronic conditions to get out of hand and become more costly to treat. If these same individuals had coverage options they could seek care in more appropriate settings, in a more timely manner, at a lower cost.
Failure to expand Medicaid will increase the current cost shifting in the system and that will increase the “hidden tax” seen in higher private insurance premiums. In states like Missouri, still debating Medicaid expansion, the debate shouldn’t be about taxes, it should be about what’s the smartest way to pay for health care because someone’s going to pay for it one way or another and we may as well pay for it in the most economical way possible – right setting, right time and right price.