3 states whose constitutions mandate Medicaid could face a $880 billion funding crisis

We hate being the bearer of bad news, so please remember, do not shoot the messenger! It’s been reported that massive cuts in Medicaid are expected, significantly affecting participating states’ low-income households. If federal funding is to be cut, three states in particular will have disastrous consequences besides the loss of access to health insurance. While some are for the possible Medicaid cuts, others are against them and the catastrophic ripple effect they will undoubtedly have.

Why the Medicaid cuts are bad news for beneficiaries

According to the official government Medicaid website, the purpose of the health insurance is to ensure that low-income Americans have access to health coverage. The health insurance is reportedly one of the largest payers of health insurance in the United States.

In 2010, a momentous decision was reached when the Affordable Care Act (ACA) was passed. The ACA’s main provision was the extension of Medicaid eligibility, resulting in millions of low-income Americans who couldn’t afford private insurance to gain access to proper health coverage. The extension meant federal funding provided for 90% of the cost, much higher than the standard 57% coverage for other beneficiaries.

Since 2014, 40 states and Washington D.C. have implemented the extension, providing health coverage to approximately 21 million Americans. This resulted in a memorable decline in the national uninsured rate.

The 3 states that will be most affected by the bad news

Supporters of the extension of federal funding of health coverage agreed that the momentous decision resulted in many saved lives. It also strengthened communities by increasing the working class’s access to healthcare. Others, however, criticized the decision due to expenses that have inflated costs, stating that the extension went too far.

With Republicans back in Congress and President Trump head of the White House again, the ACA’s policy is once again in jeopardy. Critics might soon have their way, but we do hope that Congress keeps three specific states in mind when they make the decision. South Dakota, Missouri, and Oklahoma will be affected differently than other states should federal funding be cut.

South Dakota, Missouri, and Oklahoma’s constitutions declared Medicaid participation compulsory, which means that even if federal funding is cut, beneficiaries won’t be able to turn their backs on the program. The goal of the constitution’s specific rule was to ensure the expansion in historically resistant states. Initially, the gamble paid off, but the dire consequences weren’t properly considered.

The dire consequences of the Medicaid cuts

According to the Health Insurance Marketplace from the U.S. Department of Health & Human Services, the ACA’s expansion of Medicaid coverage meant that people could qualify for health coverage based on their income alone. Should Congress approve the federal funding cuts, up to $880 billion over the next decade would be lost.

Even worse, South Dakota, Missouri, and Oklahoma, which would not even be able to withdraw from Medicaid, will be left with two options:

• Begin constitution amendments – a difficult and time-consuming event
• Try to compensate for the funding shortfall through excruciating deals

The latter could result in higher taxes, and if they want to avoid the increase, they will have to cut funding to other essential areas, such as education and transportation, which will inevitably lead to even more dire consequences.

These three states have more than 3.7 million beneficiaries who rely on Medicaid. That is a lot of people whose livelihoods are at stake, and boy, are those stakes high. We do hope that whatever Congress decides, they will use a little compassion when considering all the possible repercussions. As political and economic repercussions hang in the air by a mere thread, we know this budget fight has only begun, and only time will tell who will rise as the ultimate champion.