Health Affairs examines economic arguments around Medicaid expansion

March 20, 2016

Health Affairs looks at the economics of Medicaid expansion within the ACA framework. It says the opposition to Medicaid expansion is often couched in economic terms, with statements about the inability of states to afford the cost of coverage. The concern is that the state's eventual 10% share of Medicaid expansion spending could represent an expenditure the state could not afford. If taxes were raised to cover the expense, those taxes would dampen economic activity and, to some extent, harm the people the ACA is intended to help. The article looks at the multiplier effect and other economic factors that these concerns don't take into consideration. Health Affairs concludes a simple economic analysis gives at best an incomplete, and at worst an incorrect answer, and policymakers pondering these decisions should be aware of the full economic accounting.
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