GOP Senators Falsely Claim Affordable Care Act's Medicaid Expansion Is "Crushing" States

September 22, 2011 2:52 pm ET — Meredith Kormes

Sen. Tom Coburn

Yesterday, Sens. Lindsey Graham (R-SC) and John Barrasso (R-WY) introduced legislation that would allow states to opt out of the health care law's expansion of Medicaid. They claim that the Medicaid expansion is "crushing state budgets" and that states "deserve to have the flexibility, freedom and choice to make decisions about how best to help the people in their own state."

Medicaid currently provides health coverage for poor children, pregnant women, and seniors, as well as disabled adults. It is jointly funded by the federal government and the states, with the federal government paying on average 57 percent of the total cost. The Affordable Care Act expands Medicaid eligibility to those under 65 with an income less than 133 percent of the federal poverty level — $14,404 for a single adult or $29,327 for a family of four.

What Republicans seem to be forgetting is that the federal government will cover 100 percent of the cost for the new enrollees for the first three years starting in 2014. The federal share of funding diminishes gradually to 90 percent in 2020, and remains at that rate for all future years. The Center on Budget Policy and Priorities (CBPP) explains how the Medicaid expansion is "a good deal for the states."

Under the Affordable Care Act, Medicaid and the Children's Health Insurance Program will cover an estimated 18 million more low-income adults and children than they do today, most of whom are now uninsured. The federal government will pay 92 percent of the cost of this expansion through 2021. The cost to states over this period will be $60 billion — just 2.6 percent more than what they would have spent on Medicaid without health reform.

Additionally, CBPP notes that "having more people covered as a result of the Medicaid expansion and other provisions in the health reform law will reduce state and local governments' current spending on other services for the uninsured, such as mental health services." An analysis by the Kaiser Commission on Medicaid and the Uninsured indicated that the various estimates of state Medicaid costs don't take savings, like the reduction in uncompensated care at public hospitals and clinics, into account.

Graham believes that states will jump at the opportunity to opt out of the Medicaid expansion, but he ignores the fact the some states, like Connecticut and Minnesota, have actually started to implement it early because they see this as an opportunity to cover more uninsured individuals.

Graham and Barrasso also claim that states are going to have to cut back on other services to pay for the Medicaid expansion and therefore states should have more flexibility to deal with their Medicaid and uninsured populations. However, this is the same argument other Republicans who favor block granting Medicaid have made, and is really just a cover to chip away at the social safety net that these vulnerable populations depend on.