Republican Governor Nathan Deal said no to $33 billion in new federal Medicaid funding over the next decade. But as the federal government significantly reduces funding on Disproportionate Share Hospital (DSH) payments for the care of the uninsured, states like Georgia which turned down Obamacare's Medicaid dollars will be on the hook to make up the difference. For Grady Memorial Hospital, the largest in the metro Atlanta area, what could have been an annual boon of $60 million and coverage for 27,000 uninsured patients instead will be a $45 million loss. Georgia taxpayers will have to pay more even as hospitals likely cut services. Meanwhile, three cash-strapped rural hospitals have already closed their doors. Another 15 may follow suit in 2014. All because a Republican Governor said "no" to free money from Washington, DC.

And the funding is virtually free to the states. The federal government will pay for 100 percent of the cost of the Medicaid expansion until 2017 and 90 percent after that. But the billions the "opt-out" states will have to come up with in future years will be more than offset by their extra costs to compensate hospitals and other providers for the care of the uninsured. As Ezra Klein and Evan Soltas summed up an analysis by the RAND Corporation of 14 Medicaid rejecting states:



It finds that the result will be they get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents. So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That's a lot of self-inflicted pain to make a political point.

"Hospitals operating in states not expanding Medicaid, which usually have higher uninsured and poverty rates, will have to absorb the full impact of the ACA reimbursement cuts without the full benefit of increased insured volumes," said Adam Kates, Director in Fitch's Public Finance group. Texas, Florida, Georgia, Louisiana, Mississippi, and South Carolina are not expanding Medicaid and have among the highest uninsured and poverty rates, and some of the most stringent Medicaid eligibility requirements. Fitch believes hospitals in these states, particularly those with weak payer mixes, will be particularly vulnerable.

"It's pro-life, it's saving lives, it is creating jobs, it is saving hospitals."

"The conversation we are having with the congressional delegation goes like this, 'If we don't expand Medicaid, what is the Georgia solution to indigent care?' So far they don't have an answer."

Which is just one of the reasons why an increasing number of red state governors are accepting the dollars from DC. GOP governors in Michigan, Pennsylvania and Ohio ran the numbers. In Ohio, Governor John Kasich's decision to take Washington's money will actually produce a $400 million surplus for the Buckeye State (one which Republican legislators want to give away in the form of more tax cuts). The simple math-and simpler consideration in insuring millions of indigent patients as the DSH funding is reduced over time is precisely why hospital associations in Texas Kentucky , Georgia, Mississippi North Carolina and every other state pleaded with Republican governors and legislatures to take Obamacare's money for Medicaid expansion. Just last week, the Fitch ratings agency released a special report titled, "Adverse Expansion: Hospitals, States and Medicaid," which warned that:It's no wonder Arizona Governor Jan Brewer, certainly no friend of Barack Obama, explained her decision to extend Medicaid coverage to 300,000 more people in her state this way:Meanwhile in Georgia, Matthew Hicks, vice president for government relations at Grady lamented:Sadly, the Republican answer to the low-income uninsured and the hospitals which care for them is pretty clear. Better dead and in the red than in bed with Obamacare