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.

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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.

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

According to a study conducted by the Department of Health and Human Services and the nonpartisan Henry J. Kaiser Family Foundation, Kentucky will be the biggest winner in the proposed Medicaid expansion. Currently, 16.1% of Kentuckians under 65 are uninsured. The new Medicaid rules will reduce the number of poor people without insurance by 57.1%.

Kentucky voted for John McCain in 2008.

Currently, 18.7% of Oregonians under 65 and 12.8% under 18 don't have health insurance. Under the proposed Medicare rules, the number of poor people without insurance will drop by 56.7%.

Oregon voted for Obama in 2008.

Times are tough in the Mountain State: 18.6% of West Virginians under 65 are uninsured. If the state adopts the Medicare rule change, the number of uninsured poor people will drop by 56.7%.

West Virginia voted for McCain in 2008.

South Carolina Gov. Nikki Hailey has already vowed to reject the Medicare expansion. Her state has one of the highest percentages of uninsured citizens: 19.9% of South Carolinians under age 65 don't have insurance. 12.7% of children under 18 are also uninsured. Under the proposed new Medicare rules, the percentage of poor people without health insurance would drop by 56.4%.

South Carolina voted for McCain in 2008. It's also where the first shot was fired in the Civil War.

Like South Carolina, Mississippi has also announced its plans to reject the Medicare expansion. And, like South Carolina, it could especially use the health care funds: 20.2% of Mississippians under 65 and 12.7% of those under 18 don't have insurance. Under the new rules, 54.9% of those poor people currently without health insurance would get it.

Mississippi voted for McCain in 2008.

At the other end of the scale, Delaware is one of the states that stands to benefit least from a Medicare expansion. Only 11.8% of people under 65 in the state are uninsured. Still, with the new rules, the number of uninsured people under the poverty line would drop by 15.9%.

Delaware voted for Obama in 2008.

With an uninsured population of just 13.3%, New York also won't get much out of the new Medicare expansion. Even so, the number of poor people without insurance in the Empire State will drop by 14.8%.

New York voted for Obama in 2008.

Arizona has one of the highest percentages of uninsured citizens: 21.2% of people under 65 and 16.2% under 18 don't have insurance. Even so, the Medicare expansion won't help the Grand Canyon state all that much: it will only reduce the number of poor people without health care by 13.6%.

Arizona voted for McCain in 2008.

Vermont has one of the lowest uninsured percentages in the country: Only 10.4% of its citizens don't have health coverage. Not surprisingly, the Medicare expansion won't help that much -- it will only reduce the number of uninsured poor people by 10.2%.

Vermont voted for Obama in 2008.

Photo: Skeddy in NYC, Flickr.com

Thanks in large part to Mitt Romney's statewide health insurance program, Massachusetts is the best-insured state in the nation. Only 4.6% of citizens under 65 and 2.1% under 18 aren't insured. Not surprisingly, the Bay State will also benefit least from the Medicare expansion: it will only reduce the number of poor people without insurance by 10.2%.

Massachusetts voted for Obama in 2008.

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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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