More Rural States Vote to Expand Medicaid

Voters in three rural states, including Nebraska, approved Medicaid expansion in last week’s elections, joining Iowa and 32 other states (as well as the District of Columbia) to extend health care coverage to more low-income adults. It’s estimated that 90,000 Nebraskans and about 210,000 people in Utah and Idaho will now be eligible for Medicaid. Utah will pay for its share of expansion costs by increasing the state’s sales tax by 0.15 percentage points to 4.85 percent, which works out to about 1.5 cents for every $10 residents spend on nonfood purchases. The federal government pays for 90 percent of the health care costs incurred by those who get Medicaid benefits through the expansion measures.  A study by two University of Nebraska professors, commissioned by the Nebraska Hospital Association, concluded that the expansion would cost the state about $148 million over three years but bring $1.36 billion in federal health funding into the state over the same time frame.

Voters in Montana, however, rejected a proposal to raise taxes on tobacco and e-cigarettes to continue funding expanded Medicaid, which sunsets next year. Tobacco giant Altria, the parent company of Philip Morris, which makes Marlboro cigarettes, contributed about $17 million on cash and loans to Montanans Against Tax Hikes, which opposed the measure. In Maine, voters approved expansion in 2017, but Governor Paul LePage refused to implement the law. But the state’s new governor said she will implement expansion on her first day in office.

Similar to Maine, newly elected governors in Kansas and Wisconsin have raised the prospects for expansion in those states. Democratic Governor-elect Laura Kelly of Kanas has promised to advocate for and sign a bill approving Medicaid expansion in her first year in office. Although both houses of the Legislature remain in Republican control following the 2018 midterm election, expansion has received bipartisan legislative support in the past. Passage of the Medicaid expansion through the Wisconsin State Legislature could be a challenge even with the election of  Democratic Governor Tony Evers, as both houses of the Wisconsin Legislature remain in Republican control.

The Affordable Care Act (ACA) allows states to expand Medicaid access to childless adults whose incomes are below 138 percent of the federal poverty level. In the last two years, multiple attempts in Congress to repeal the ACA would have also ended expanded Medicaid. Many studies on the effects of the ACA Medicaid expansion point to positive effects on coverage, access to care, service utilization and state budgets and economies. Where it has been adopted, expanded Medicaid has increased access to health care and made it less likely individuals will skip care because of cost. Expansion has also bolstered finances at rural hospital. The majority of recent rural hospital closures – about 90 since 2010 – have occurred in non-expansion states.