Assessing a Very Costly Medicaid Expansion

In 2010, Congress passed the Patient Protection and Affordable Care Act (PPACA), a massive health care overhaul that asserted fresh federal control over nearly one-fifth of the U.S. economy. As written, the PPACA would have, among other things, forced states to expand their Medicaid programs or risk losing all of their existing Medicaid funding. Ultimately, the U.S. Supreme Court struck down the law’s mandatory Medicaid expansion provision, finding that it was impermissible under Congress’s spending power. As a result, states do not have to choose between expanding their Medicaid eligibility or losing federal funding for their entire Medicaid programs. Indeed, many states have already rejected the expansion.

Missouri policymakers have a decision to make, but if they are going to seriously consider expanding the state’s Medicaid program, two fundamental — and so far, largely neglected — questions must be answered: How much would the expansion cost Missouri taxpayers, and how would the state pay for it?