The Supreme Court's Bailout of Red State Democrats

A blog about business and economics.
Nov. 15 2012 3:42 PM

The Supreme Court's Bailout of Red State Democrats

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The big defeat the Obama administration took in the Affordable Care Act litigation is that the Supreme Court made it much easier for states to opt out of the law's Medicaid provisions. And per the map above (via Sarah Kliff) an awful lot of states are going to opt out, at least initially.

This is going to severely blunt the law's practical ability to expand insurance coverage. The uninsurance rates tend to be highest in the kind of low-income politically conservative states that are most reluctant to fund the Medicaid expansion.

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On the other hand in political terms something I've heard from progressives who live in these states is that the Supreme Court has basically gifted them a great future political issue. In the very shortest of short-terms the issue is simple. In these states, Obama is unpopular so Obamacare is bad, so refusing to participate is good. But in concrete practical terms, these states are essentially passing up free money. Well over 90 percent of the cost would be covered by the federal government, meaning that states that refuse to participate are skipping a bonanza. The winners in Medicaid expansion aren't just low-income families, it's also doctors and hospitals and the kinds of firms that employ low-wage workers or rely on low-income customers.

All in all, "accept the federal government's free money to give our people health insurance" ads up to a pretty compelling political pitch even to an electorate that may otherwise be skeptical to what Democrats are selling.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.