* RAND study could point to bigger-than-expected impact
* States would miss $8.4 bln in funds but retain $1 bln cost
* Mortality rates also affected if states choose not to expand
By David Morgan
WASHINGTON, June 3 (Reuters) - Fourteen Republican-led states that oppose expanding Medicaid under President Barack Obama's health reform will leave 3.6 million of their poorest adult residents uninsured, at a cost of $9.4 billion per year by 2017, researchers said on Monday.
The findings, published in the journal Health Affairs, could point to a larger-than-expected impact from the bitter political feud engulfing a major provision of the healthcare reform law due to take full effect next year.
The law calls for Medicaid coverage to be expanded to people with earnings of up to 133 percent of the federal poverty level, but a Supreme Court decision last year allowed states to decide whether to participate.
Researchers in two separate Medicaid studies say leaving more adults without coverage also risks buoying mortality rates by blocking access to care, leading to higher costs. The poverty line currently stands at $11,490 for an individual and $23,550 for a family of four, and the current threshold for Medicaid eligibility means the services are often limited to dependent children and their parents, pregnant women and those with severe disabilities including the very old.
Republican-led states such as Arizona, Kansas and Maine are nearing the end of legislative debates on whether to join the Medicaid expansion.
"We're trying to sort of inform the debate. If a state policymaker has the goal of covering as many people as possible and reducing the financial risk for that population, expanding Medicaid is the most rational choice," said Carter Price, co-author of a study by RAND Corp, a nonpartisan think tank that receives government funding.
"It's also better for the state fiscally because states fund a lot of programs for uncompensated care," he added.
Under Obama's 2010 Patient Protection and Affordable Care Act, the federal government is offering to pay states 100 percent of the cost of expanding Medicaid for three years beginning in 2014, declining to 90 percent in subsequent years.
Before the Supreme Court decision, the Medicaid expansion was expected to extend coverage to more than 16 million uninsured people, with incomes of about $15,500 for an individual and $32,000 for a family of four.
The latest estimate from the Congressional Budget Office anticipates 3 million fewer Medicaid recipients than predicted before the Supreme Court ruling.
"Our numbers are certainly higher than theirs. But we're all in the three-to-four million range," Price said.
The RAND study found that 3.6 million people, all of them living below the federal poverty line, would be locked out of Medicaid coverage in 14 states with Republican governors who oppose the expansion: Alabama, Georgia, Idaho, Iowa, Louisiana, Maine, Mississippi, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas and Wisconsin.
Those states would forego an estimated $8.4 billion in federal funding for the Medicaid expansion in 2016 alone, while continuing to incur an annual $1 billion cost from caring for the uninsured, RAND found.
The figures could climb higher. According to the nonpartisan Kaiser Family Foundation, a total of 20 states have failed to move forward on the expansion. Eight more remain undecided. Those include some with large populations, such as Ohio, Michigan and Arizona, where Republican governors who favor expansion have run into legislative opposition from within their own party.
Some states have decided to let would-be Medicaid recipients obtain subsidized private insurance plans instead through new online marketplaces being set up under the health law. But unlike Medicaid, those plans carry copay and deductible charges that would make it harder for people living below the poverty line to cover out of pocket.
RAND found that if all 14 states in its study opted out of the expansion, they would impede a projected reduction in mortality rates. Fully expanding Medicaid would reduce mortality by 90,000 lives per year, the study said. The number would fall to 71,000 without those states.
A separate study led by researchers at the University of Wisconsin looked at a state health program that covers childless adults with incomes of up to 200 percent of the federal poverty level.
The program, launched in 2009, offers less-generous benefits than the Medicaid expansion that Wisconsin has rejected. But within 12 months of enrollment, beneficiaries had increased outpatient visits 29 percent and emergency room visits by 46 percent. At the same time, costly in-patient care fell 59 percent while preventable hospitalizations dropped 48 percent. (Editing by Michele Gershberg and Matthew Lewis)