View: Rolling back Medicaid won't save Kentucky money

That’s because looking at the state expense in isolation ignores the economic impact of the other 90 percent. Every dollar the federal government spends on health care in Kentucky is a dollar of revenue for hospitals, doctors and other health-care providers. The money creates jobs, spurs investment, draws skilled workers — and generates tax revenue.

In 2015, Medicaid expansion in Kentucky is expected to generate an extra 35,000 jobs, $1.3 billion in payroll and $3.5 billion in economic output. That translates into an extra $127 million in new revenue through income, sales and occupational taxes. The estimates are similar for other states.

By contrast, choosing not to expand Medicaid (or, in Kentucky’s case, becoming the first state to roll it back) generates added costs, chiefly in treatment for uninsured residents. Hospitals have to spend more on uncompensated care.

That extra spending alone can exceed the amount states save by not expanding Medicaid. According to one study, if states’ refusal to expand Medicaid leaves 5.2 million without coverage, those states will save $6.25 billion — but their hospitals will spend $6.4 billion more.

Of course, the decision on whether to extend health insurance to Americans who can’t otherwise afford it should not rest only on budgetary grounds. Having insurance also improves people’s quality of life. But financial reasoning alone makes the case for Medicaid expansion. In the past year, Alaska, Montana and Indiana have overcome their reluctance to sign up. Before taking his state in the opposite direction, Bevin should look closer at the problem he’s trying to solve.

—Editors: Christopher Flavelle, Mary Duenwald.