FOUR MYTHS ABOUT MEDICAID EXPANSION FUNDING—AND HOW TO DEBUNK THEM

Overview Under the Affordable Care Act, more commonly known as ObamaCare, states were given the option to expand Medicaid to an entirely new class of able-bodied adults.1 Since 2014, many states have decided to expand, lured by the false promises of free federal funding and the economic boost that is supposed to follow.2 SINCE 2014, MANY STATES HAVE DECIDED TO EXPAND, LURED BY THE FALSE PROMISES O. [...] Expansion advocates often misrepresent data and Medicaid funding mechanisms to deceive states that stand in opposition.4 One of the primary falsehoods pushed by proponents is that expansion is good for a state because it supposedly “brings back” tax dollars that the state sends to the federal government—implying that they have a right to it.5 Expansion advocates also claim that by rejecting Medica. [...] 4 FOUR MYTHS ABOUT MEDICAID EXPANSION FUNDING—AND HOW TO DEBUNK THEM | MARCH 19, 2024 | TheFGA.org The Medicaid program is a federal-state partnership, meaning that states administer the program and a portion of program costs are reimbursed by federal tax dollars.15 States are only reimbursed for actual expenditures accrued by enrollees—expansion status plays no role in the funding mechanism.16 As. [...] The amount of federal funding expansion states receive will continue to be based on actual expenditures—the same way non-expansion states are reimbursed.18 Expansion states are not gifted extra tax dollars—there is no magic pot of Medicaid expansion money. [...] In 2014, when expansion began in many states, the federal government footed the bill for 100 percent of the program’s benefit costs, and states were responsible for the increase in administrative costs.26 But in 2017, costs began to shift onto states and increased to 10 percent in 2020—with state taxpayers left holding the bag.27 Non-expansion states should view this as a cautionary tale.