Medicaid Expansion States V States That Didn't Studied

The bottom line to take from this article and the study by the Kaiser Foundation study is 'there is no free lunch'. There no such thing as free money. Someone some place has to pay the bill. And taking money from the feds is certainty not free as there are always strings attacked that will in the end make your states problem even worse.

The theorem, Newton's third law of physics applies here to some degree, 'for every action there is an opposite and  equal reaction'. If you take money from others to solve your problems, it's realistic to believe your problems will not be solved but only grow larger and worse as the problem was never solved in the first place.

Taking personal responsibility for your own actions and decisions solves problems. Allowing others to take charge compounds the problem as others have a different agenda then you do.

Why Do States Expand Medicaid?
By Devon Herrick

In September the Kaiser Family Foundation released a report comparing Medicaid expansion states with states that have chosen not to expand Medicaid. The report generated little fanfare among either supporters or opponents of Medicaid expansion. It should have created a firestorm. The report sheds light on why many states have seemingly turned down free federal Medicaid funds, while other states eagerly gorge at the public trough.

Why have some states expanded Medicaid while others have not? Proponents of Medicaid expansion paint conservatives who oppose expansion as both heartless and fiscally foolhardy. At the same time, expansion advocates are prone to argue they expanded Medicaid for economic reasons. After all, they are getting federal funds their state residents benefit from but don’t have to pay for. Yet upon closer inspection, the evidence points to a more fundamental conclusion: expansion states are spendthrifts, eager to spend not only their own residents’ money but money from other states’ taxpayers as well.

States that expanded Medicaid tend to have per capita state spending that’s about 17 percent higher than non-expansion states. For starters, states that have declined to expand Medicaid tend to be fiscally conservative, with lower state taxes and lower state spending. By contrast, expansion states tax their residents more. In 2004, expansion states had median per capita tax collections (both state and local) of 19 percent more than non-expansion states. By 2012, this gap had widened with expansion states collecting 28 percent more taxes per capita than non-expansion states. Moreover, since 2008 expansion states have moved to increase taxes, while non-expansion states have reduced taxes slightly.

The Kaiser report also looked at “taxing capacity”. That is a nebulous term, but it basically measures the degree to which state are taxing their citizens as much as possible. It’s a function of both income and tax rates. In 2004 expansion states and non-expansion states were extracting taxes from residents at nearly equal levels when comparing their so-called taxing capacity. By 2012 expansion states had boosted collections as a percent of taxing capacity by 17 percent compared to non-expansion states. States that expanded Medicaid do tend to be slightly wealthier than non-expansion states, on average. But the gap is narrowing, possibly due to state fiscal policies that run counter to economic growth.

In 2001 expansion states had real median income that was nearly 13 percent higher than non-expansion states. However, by 2013 this gap had narrowed to just over 9 percent. Expansion states have historically had slightly lower poverty rates, but the difference was only 1 percentage point by 2012 (12.9 percent vs. 13.9 percent). Non-expansion states, although slightly poorer, have lower unemployment than expansion states (6.7 percent versus 7.2 percent). That may defy conventional wisdom but it should not come as a surprise. It’s the result of lower economic freedom in expansion states. Expansion states tend to have about 30 percent more workers in the health care sector. But this was also true long before the ACA. The decision to expand Medicaid in some states may have been to prop up their bloated health care sectors.

Medicaid expansion has not been shown to create jobs. From 2008 to 2013, annual health care employment growth in both expansion and non-expansion states was about the same from (1.9 percent). Historically, from 2000 to 2013, health sector employment growth was actually higher in non-expansion states (2.5 percent vs. 2.2 percent).

There you have it. Expansion states were historically richer, but that is changing due to their presumed fiscal irresponsibility. They have less economic freedom, tax their residents more and spend more of their taxpayers’ money. Conservatives in states that chose not to expand Medicaid are under intense pressure to drink the Medicaid expansion Kool-Aid. But, in retrospect, states that expanded Medicaid pursue fiscal policies that are nothing to emulate.