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The Arizona Medicaid Expansion Experience

June 26, 2019

The study debunks the idea that employer insurance plans are subsidizing the uninsured through cost shifting.

Arizona expanded Medicaid in 2013 and one of the arguments has been that employer insurance plans were subsidizing the uninsured, paying higher hospital bills, for example, to cover the unreimbursed expenses of people without insurance. 

"The primary beneficiaries of Arizona's Medicaid expansion are not the people, but the politically connected hospitals.  The most common justification for Arizona's Medicaid expansion was the reduction of the "hidden healthier tax," where employers and employees are left paying high health insurance premiums resulting from hospitals' uncompensated care charges and costs.  Arizona's Medicaid expansion did not alleviate the so-called hidden healthcare tax on the insured.  This study fount that if the cost shifting to private payers amounted to 14 percent more than hospitals' costs in 2007 as Medicaid expansion proponents claimed, it increased to 27 percent in 2016."