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The Affordable Care Act’s Medicaid expansion is an even better deal for the states than previously thought, according to the latest estimates from the Congressional Budget Office — and that could seriously complicate Republican hopes of winning a Senate majority in November.

As the Center on Budget and Policy Priorities’ Edwin Park explained in a blog post on Tuesday, the new estimates lay waste to the GOP talking point that Medicaid expansion is unaffordable:

  • CBO now estimates that the federal government will, on average, pick up more than 95 percent of the total cost of the Medicaid expansion and other health reform-related costs in Medicaid and the Children’s Health Insurance Program (CHIP) over the next 10 years (2015-2024).
  • States will spend only 1.6 percent more on Medicaid and CHIP due to health reform than they would have spent without health reform (see Figure 1). That’s about one-third less than CBO projected in February. And the 1.6 percent figure is before counting the state savings that the Medicaid expansion will produce in state expenditures for services such as mental health and substance abuse treatment provided to the uninsured.

CBPP chart

The CBO’s revision, which represents the latest in a string of good news for the health care reform law, create a political dilemma for several Republican Senate candidates who have spoken out against expanding Medicaid. In Louisiana, for example, Rep. Bill Cassidy (R-LA) — the top Republican challenging incumbent senator Mary Landrieu — has vehemently opposed the measure, claiming that it would “bankrupt states.”

The Affordable Care Act is certainly a liability for Landrieu — polls tend to find that vast majorities of Louisianans disapprove of the overall law — but individual measures such as Medicaid expansion are a different story.

Over the past several months, Louisiana’s Republican governor, Bobby Jindal, has faced a sustained campaign criticizing him for refusing to accept Medicaid expansion, which would allow 240,000 Louisianans to obtain coverage. In a Tuesday interview with The Washington Post‘s Greg Sargent, Senator Landrieu revealed that she will try to turn the movement against Cassidy as well.

“That would be a real setback for the people of Louisiana, many of whom are working 30, 40, 50 hours a week but find themselves caught in the Jindal gap because the state refuses to expand health care options to the working poor at little to no expense,” Landrieu told Sargent, referring to Jindal’s refusal to accept Medicaid expansion.

“This issue is not going away — it will become an issue in the 2015 governor’s race,” she added. “Cassidy has wrapped himself up with Jindal. The question is whether people who work full time or part time in the U.S. should have access to quality and affordable health care.”

Landrieu’s political calculus is clear: As unpopular as President Obama is in Louisiana, Jindal is even more reviled (a recent New York Times/Kaiser Family Foundation poll found their approval ratings at 42 and 40 percent, respectively). Every bit of news that makes Medicaid expansion seem more reasonable hurts Jindal — and if Landrieu is successful, every bit of news that hurts Jindal will hurt Cassidy. It’s a formula that other red-state Democrats are likely to follow.

Photo: Gage Skidmore via Flickr

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