The Congressional Budget Office has estimated that failure of some governors to expand Medicaid under the Affordable Healthcare Act will reduce the cost of the program by 84 billion dollars. Not only will conservative governors provide financial support for Obamacare by refusing to expand Medicaid, but they will preside over one of the largest unintended transfers of wealth in the nation's history.
Obamacare has two key elements. Receiving the most attention, has been the mandate. Increasing participation by those who can afford health insurance through imposition of a penalty on those who fail to buy coverage is important. It is the quid pro quo for removing preexisting condition restrictions on coverage.
But the big ticket item is the expansion of Medicaid to cover the working poor. For the first 3 years this expansion is fully paid for by the federal government, and 90 per cent thereafter. Citizens of all states will bear the cost, but, if conservative governors have their way, only citizens of some states will receive the benefits.
This will result in the reduction of insurance premiums in purple and blue states relative to deep red states. The Center for American Progress has estimated that annually $410 of individual, and $1110 of family, insurance premiums cover provider loses for treating the uninsured. If premiums only drop by one half of this amount it will result in a significant income transfer to residents of adopting states. Holders of individual policies will have more money, corporations, that provide insurance coverage, will have more profit. Lower insurance premiums will factor into decisions of location, or relocation, of businesses. By placing principle over principal, Republican governors deny health coverage to the working poor in their states, and financial benefits to those already insured.
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