Sherry Glied and Stephanie Ma: How States Stand to Gain or Lose Federal Funds by Opting In or Out of the Medicaid Expansion:
The Supreme Court ruled to allow states to choose whether to participate in the expansion. Many of the states declining to participate have pointed to a potential negative impact on their budgets.... We compare the expected flow of Medicaid expansion-related federal funds in 2022... to payments to state governments through federal highway subsidies and payments to state businesses through defense procurement... to taxes raised by the federal government to fund the program... the state’s share of the cost of the Medicaid expansion in 2022—the match needed to draw these federal funds—to state expenditures that aim to draw private investments to states.
We find that the Medicaid expansion will be a relatively large source of federal revenue... 2.35 times as great as expected federal highway funds... over one-quarter as large as expected defense procurement... No state would experience a positive flow of funds by choosing to reject the Medicaid expansion... taxpayers in non-participating states will nonetheless bear a significant share of the overall cost of the expansion... and not enjoy any of the benefits. Most states’ budget costs of expanding Medicaid each year will be, on average, less than one-sixth the amount they pay to attract private businesses..."