Red States Are the Big Winners from Obamacare's New Rules

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Republican States will benefit from Obamacare Most
Now that the Patient Protection and Affordable Care Act -- aka "Obamacare" -- has passed muster before the Supreme Court, the next question is how it will be implemented. Some parts of the law, like the one that will stop insurers from denying you care for preexisting conditions, will simply go into effect at their appointed times. To bring other provisions online, however, the federal government will have to work with individual states, some which have governors intensely opposed to the program. Oddly enough, many of the states whose leaders like Obamacare the least are the ones that will benefit from it the most.

Texas is a good example. On Monday, Gov. Rick Perry joined the governors of Wisconsin, Florida, Louisiana, Mississippi, and South Carolina in refusing to take part in the program's Medicaid expansion, which would extend Medicaid coverage to people making up to 133% of the poverty line. In context, this means that, under the PPACA, single people who make less than $14,857 would qualify for Medicaid, as would a family of four that brings home less than $30,657.

Obamacare

The trouble is, individual states provide 43% of the funding for Medicaid and administer the program. As such, they can determine who qualifies for it. As The Washington Post's Ezra Klein notes, Texas' cutoff is 26% of the poverty line, which means that a single person earning $2,905 per year is too wealthy to receive Medicaid in the Lone Star state. Not surprisingly, 26.5% of Texans under age 65 don't have insurance -- the highest uninsured rate in the country.

There's a big distance between $2,905 and $14,856, and if Texas accepted the Medicaid expansion, everyone who falls into that chasm would get free medical insurance. That might sound like a bad deal for Texas, which would be stuck with a big increase in Medicaid costs. However, until 2020, the ACA will completely cover the difference for each state -- in other words, Texas wouldn't have to spend a penny to insure millions more of its citizens. After 2020, the PPACA will still fund 90% of the difference.

The same drama is the playing out red states across the country. States where conservatives are in charge tend to have stingier Medicaid requirements that give coverage to only the most, compared to liberal states, which generally make it easier for poor people to get subsidized health care. In fact, nine of the 10 states that would benefit the most from the PPACA's Medicaid expansion voted for McCain in the 2008 presidential election, while eight of the 10 states that will benefit least voted for Obama.

Perry's intransigence isn't surprising: Pretty much every time the federal government has offered new health care funds, a few states have fought against taking the money. Eventually, though, the lure of federal largesse is always too much to resist. Despite delays, every state adopted Medicare and CHIP -- although some, like Texas, maintained exceedingly draconian requirements. Most experts agree that Perry and the other holdouts will eventually accept the Medicare expansion. The alternative would be accepting the tough task of explaining to voters why they refuse to insure millions of their citizens at a minimal cost to state taxpayers.


Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at@bruce1971.


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Rustydobe

Amazing that the morons who are commenting against Obamacare would squeal to high heaven if billed for the homeless, poor and indigent's health care. They just don't get that they ARE paying for those folks to get the most expensive health care available - the emergency room! Perry, Haley, Scott and the rest of the Tea Bagger governors will screw their own people for a vote. Pitiful.

July 21 2012 at 3:48 PM Report abuse +1 rate up rate down Reply
lonniedrake

That's a problem with this (his) care. States have a right to say NO, but then his admin will throw it out that cuz of the state u the poor don't have insurance. When if u really look at it--the poor already have it, the rich don't need it and the middle class cann't afford it. There is not one country that is saying oh boy look at us. Cuz look that their taxes.

July 21 2012 at 3:35 PM Report abuse -1 rate up rate down Reply
1 reply to lonniedrake's comment
icyrebel

people will still flock to the emergency room...

July 21 2012 at 5:12 PM Report abuse rate up rate down Reply
DDerr

No one will win with Obamacare in the long run. In the short run, people who have not prepared themselves nor every paid into the US System will make out like bandits. Take from those who have been paying into the system, and actually educated themselves and worked hard, and give to those who have neither prepared themselves, NOT contributed to the American tax system. This is what Obama has done. He hasnt paid for any of his giveaways: Car bailouts, bank bailouts, wallstreet bailouts, increased entitlements including welfare (YAY!), foodstamps, benefits, military coverage, OBAMA HAS PAID FOR NONE OF THESE "LOVE ME LOVE ME" bailouts and giveaways! He is going to have the next president pay for his wonderful actions, so people will love him, and hate the people he passes the debt on to, and are actually responsible in trying to pay his CRAP OFF. What a horrible president. Even tho he is much smarter than Bush, and can actually complete full sentences, OBAMA has spent $5 Trillion he did NOT have, so people would love him. In sad Fact, Obama has increased the debt more in 3.5 years than BUSH did in 8 disastrous years!
AND FOR THOSE WHO ARE JUST GLOWING CUZ OBAMA IS GONNA GIVE YOU HEALTH CARE EVEN THOUGH YOU DO NOT PAY INTO THE SYSTEM AND DO NOT DESERVE IT: SHAME ON YOU FREELOADERS! Get an education, and get a job.

July 16 2012 at 1:05 PM Report abuse +2 rate up rate down Reply
gbelter777

Weird dream last night. B.O. was looking down at a white cake with small chocalte chips swirled around the bottom and sides. The top of the cake said: One Term President
Looks like my vote will change.

July 15 2012 at 3:37 PM Report abuse +2 rate up rate down Reply
Hello

Oh Obama care will be great! Well until the money runs out, and the problems build up from the whole mess. Hey I can even retire early because of Obamacare! But darn, my heart makes me think of my kids and grand kids, and what a mess they'll be left with. So even if it's better for me, I still have to say no to it.

July 15 2012 at 2:22 PM Report abuse +2 rate up rate down Reply
z4rock

These Governors don't like this program cause they can't afford it. That's a fact Jack.

July 15 2012 at 10:18 AM Report abuse +3 rate up rate down Reply
BeagleDawg

THIS IS THE MOST ABSURD ARTICLE I HAVE EVER READ. HOW DOES A STATE BENEFIT WHEN OBAMACARE INCREASES COSTS AND PUTS THE NATION FURTHER IN DEBT? FORCING PEOPLE TO BUY SOMETHING THEY CAN'T AFFORD IS STUPIDITY. INCREASING THE COST TO BUSINESSES WILL ONLY STRANGLE SMALL BUSINESSES AND INCREASE UNEMPLOYMENT. WAKE UP AMERICA.

July 15 2012 at 8:04 AM Report abuse +3 rate up rate down Reply
1 reply to BeagleDawg's comment
n5monthsocrapleft

AMERICAN BUSINESS WILL JUST KEEP THERE COMPANIES OVERSEAS UNTILL THIS MUSLIM CLOWN N HIS RECORD 10% UNEMPLOYMENT~~RECORD FORECLOSURES~~RECORD JOB LOSSES FOR THE LAST 41 MONTHS N THE MUSLIM CLOWNS UNCONSTITUTIONAL WELFARE "HELL" CARE IS ABOLISHED ~~>AMERICA IS CLOSED N WILL STAY CLOSED UNTILL. !<~~~

July 15 2012 at 10:54 AM Report abuse +1 rate up rate down Reply
ha6ai

Will AOL finally FIRE Bruce Watson?

One absurd disgusting Obama-propaganda piece after another!

AOL/HuffPuff is disgusting.

July 15 2012 at 3:12 AM Report abuse +5 rate up rate down Reply
jenyouwino

There are positives and negatives (mostly the latter) to Obamacare. 2000+ pages of hidden taxes to further fleece the middle class benefits no one except BIG government. The country needs a more fair and comprehensive health care system, but it doesn't need a government take over. And for those who have some preconceived notion that Obama will soak the rich to pay for his signature initiative - DREAM ON! You are beyond delusional.

July 14 2012 at 9:09 PM Report abuse rate up rate down Reply
n5monthsocrapleft

THE COUNTRY IS "STILL" IN THIS MUSLIM CLOWNS "GREAT RECESSION" N THE COUNTRY WILL STAY CLOSED UNTILL THIS MUSLIM CLOWN IS REMOVED FROM OUR WHITE HOUSE IN HANDCUFFS ALONG WITH HIS ~RECORD UNEMPLOYMENT~~RECORD FORECLOSURES~~RECORD JOB LOSSES FOR THE LAST 41 MONTHS . !

July 14 2012 at 4:27 AM Report abuse +5 rate up rate down Reply
1 reply to n5monthsocrapleft's comment
n5monthsocrapleft

the muslim clown continues to sabotage n hold the whole country hostage by not giving "ALL" americans tax breaks ~~""ITS ALL OR NONE AT ALL""~~>OBAMY ==OBSTRUCTIONIST N STILL OBSTRUCTING.!

July 14 2012 at 9:14 AM Report abuse +1 rate up rate down Reply