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RAND Corporation Study Shows Increased Costs for States that Decline Medicaid Dollars

Press Release

Location: Jefferson City, MO

An independent study emphasizes the importance of strengthening Medicaid in Missouri, and shows why Republican governors like Terry Branstad of Iowa are moving forward with Medicaid expansion in their states, Gov. Jay Nixon said today. According to a study published yesterday by the RAND Corporation, states that choose not to strengthen Medicaid will increase spending on the cost of treating uninsured residents and forgo billions in federal dollars.

"This independent study builds on the already overwhelming evidence that strengthening Medicaid in Missouri is the right thing to do for our citizens, and the smart thing to do for our state," Gov. Nixon said. "Turning down the federal dollars available to expand and improve Medicaid in Missouri will increase costs and send billions of Missourians' hard-earned tax dollars to other states. That is why we are seeing governors and state lawmakers of both parties, all across the nation, seize this opportunity to improve access to basic health coverage and save taxpayers billions."

RAND found that in the fourteen states opting out of Medicaid expansion, 3.6 million fewer people would have health insurance while state spending on uncompensated care could increase by $1 billion in 2016 alone. Federal payments to those states would fall by $8.4 billion. The study's authors recommended that state policy makers "be aware that if they do not expand Medicaid, fewer people will have health insurance, and state and local governments will have to bear higher costs for uncompensated care."

Applying methodology from another recent study, RAND projects "that fully expanding Medicaid eligibility could reduce mortality by 90,000 lives per year. The mortality reduction would be only 71,000 lives per year if fourteen states opted out of the expansion."

The Associated Press reported this week that officials in Iowa were moving forward with their Medicaid expansion plan, after Republican Gov. Terry Branstad and state lawmakers reached compromise on increasing eligibility up to 138 percent of the federal poverty level. Branstad touted the Iowa Health and Wellness Plan as a better alternative to the "old Medicaid system" that would give Iowans "more ownership" over their health decisions and make Iowa a national leader.

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