By Tara Mancini

We all know why the Medicaid expansion is a good deal for states, but it also benefits state residents who stand to become insured. In addition to the obvious benefit of providing access to affordable healthcare, it also has the potential to bring more economic stability to the newly insured.

A recently released report  from the Urban Institute on the financial burden of medical spending, that is, out-of-pocket (OOP) medical costs as a proportion of income, illustrates the potential benefit of extending Medicaid for low-income individuals in every state.

Researchers defined high burden as those whose share of income spent on OOP medical costs ranked in the top 25%, nationally and for each state. Nationally, those with a high burden spent about 8.2% of their income on OOP medical expenses. The study also found in every state that those with high burden and income below 138% FPL spent a much higher percentage of their income on OOP medical costs than those with high burden above 138% FPL.

Table 3 nicely demonstrates the share of each state’s residents that stand to benefit from the ACA’s Medicaid expansion by estimating the share of it’s citizen population with high medical burden, income below 138% FPL, and no Medicaid coverage. Nevada has the largest share with 8.1%, while Vermont has the lowest with just three percent. Unfortunately, six of the ten states with the highest share of these residents have been, thus far, recalcitrant to moving forward on the Medicaid expansion. (The six states are: Louisiana, Mississippi, Georgia, Alabama, Utah, and Idaho.)

Two recent studies corroborate the ability of Medicaid to curtail beneficiaries’ OOP spending. A study in the Journal of Internal Medicine found that among low-income adults, Medicaid beneficiaries are less likely to be underinsured (having OOP costs greater than 5% and delaying or foregoing necessary medical care or prescriptions due to cost). And the second phase of the Oregon study found that Medicaid coverage nearly eliminated catastrophic costs, defined as OOP expenditures in excess of 30% of income.

Clearly, reducing the financial burden on underinsured and uninsured residents is another important reason for states to accept federal funding and extend Medicaid coverage to more residents in need. Hopefully, this can be the “pro” that tips those slow-moving states in favor of doing so.