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First TV spot in Medicaid expansion campaign focuses on tax dollars

October 10, 2018

A screenshot from a television commercial supporting Proposition 2, the Medicaid expansion initiative in Idaho.

The first TV campaign commercial is out in the initiative campaign to expand Medicaid in Idaho, and it focuses on returning federal tax dollars to Idaho rather than letting them go to other states — a claim the measure’s opponents immediately decried as false.

“That’s not how it works,” declared Wayne Hoffman, president of the Idaho Freedom Foundation, the leading opponent of the initiative. “States don’t get more money because there are 17 or 18 states that haven’t expanded Medicaid. And they’re are not going to get less money if the state expands Medicaid.”

It’s true that the amount of federal tax money Idahoans pay in remains the same whether Idaho expands Medicaid or not, and that’s true of other states as well. That’s because Medicaid expansion funds are doled out to states based on the number of qualifying patients, not based on the amount of taxes the state pays in.

In fact, overall, Idaho is what’s called a “donee” rather than donor state — its residents pay in less in federal income taxes than they receive back in federal services.

But the individual federal income tax dollars we pay aren’t pegged to particular programs; they all go into the federal treasury, and are then divided up by Congress to fund programs.

Caroline Merritt, communications director for the Idahoans for Healthcare campaign, said, “From our standpoint, Idahoans pay their fair share in federal taxes, and every year those revenues help fund federal programs in all 50 states. And some of those funds are used for Medicaid expansion, which is a program that is active in these other states, but Idahoans are ineligible for it currently. … Not one penny of our tax money for Medicaid expansion came back to Idaho.”

Robin Rudowitz, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said of the ad, “We certainly wouldn’t use those terms.”

But, she said, “I would say that it is true that states pay tax dollars and those tax dollars are financing expanded coverage in other states. And Idaho, because they have not adopted the expansion, is not accessing the federal dollars that are available to the state.”

“To the extent that Idaho has not adopted the expansion, they’re not drawing down those federal dollars that would be available as part of the expansion,” Rudowitz said.

Jaclyn Kettler, Boise State University political scientist, said of the ad, “The facts themselves are true. They are perhaps drawing a linkage in a way that is very debatable … because it doesn’t quite work like that.”

Hoffman said in a statement, “Idahoans for Healthcare is correct on this point: The state of Idaho would receive more federal money if Medicaid is expanded. But that money won’t be pried out of the state treasuries of Medicaid expansion states like California, Oregon and Washington.”

Hoffman said he believes because the federal government runs a deficit, any dollar spent on Medicaid expansion would simply add to the national debt. But Rudowitz noted that the Affordable Care Act, which included Medicaid expansion, was rated when it passed as deficit-neutral, because various provisions within it that raised or saved money offset its costs.

Rudowitz said the other claims in the new ad are backed up by Kaiser’s research, which shows states that have expanded Medicaid have seen specific economic benefits to rural hospitals, and a number have “estimated net fiscal benefit from adopting the expansion, even though states need to pay a small share of the cost of the expansion.”

Merritt pointed to an August 2018 study by Steven Peterson, a clinical associate professor of economics at the University of Idaho, that found that Medicaid expansion would both directly and indirectly generate economic activity, including new jobs and additional tax revenue in Idaho.

The new commercial, which began airing last week, is running in the Boise, Twin Falls, Idaho Falls and Lewiston TV markets.

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