Medicaid Debate Is Also About Race

June 7 (Bloomberg) -- At least 14 states, including Texas, Mississippi and South Carolina, oppose taking federal money to expand their Medicaid programs under Obamacare. That's bad fiscal policy: As two RAND Corporation scholars wrote this week, those states will see an annual net loss of $8.4 billion in federal money as a result.

Turning down the new Medicaid money is bad policy in another sense: It could worsen racial inequality. Advocates of expansion have avoided talking about this, perhaps for fear of polarizing the debate, but Census figures make clear that Medicaid and race are inextricably linked.

In 2011, blacks were almost twice as likely as whites to be uninsured. And though they made up just 14 percent of the U.S. population, blacks accounted for 20 percent of Medicaid rolls. Hispanics were almost three times as likely as white non-Hispanics to be uninsured and made up 29 percent of Medicaid beneficiaries.

The disproportionate impact of Medicaid is even more telling at the state level. In Alabama, Georgia and South Carolina, among the states that say they won't expand, at least 45 percent of those in the program in 2011 were black, according to the Kaiser Family Foundation. In Louisiana, 57 percent of Medicaid beneficiaries were black; in Mississippi it was 67 percent.

The benefits of the Medicaid expansion would be similarly skewed along racial lines. In Mississippi, 50 percent of those who would gain coverage are black, according to a 2012 Urban Institute study. In Louisiana, the figure is 47 percent; in South Carolina, 43 percent. In Texas, 48 percent of those who would gain coverage are Hispanic.

In South Carolina, 218,000 black adults lacked health insurance in 2011, according to the U.S. Census Bureau's American Community Survey. If the state chose to accept federal money to expand its Medicaid program, 59 percent of those people would gain coverage. The corresponding figures are 57 percent in Mississippi, 54 percent in Louisiana and 48 percent in Texas.

The ease of lowering minority uninsurance rates, paid for largely by federal money, makes health care different from other types of racial disparity. There's no easy fix for inequality in education, or in housing or employment. By contrast, lawmakers could end a meaningful portion of racial inequality in health insurance in their states at one stroke.

Meanwhile, under Obamacare, if your income is between 138 percent and 400 percent of the poverty rate and your employer doesn't provide affordable coverage, you can get a tax credit starting in 2014. When you add in Medicare, coverage for veterans, the Indian Health Service and tax breaks for employer-sponsored insurance, that means that among the only Americans who won't get government-assisted health care will be those at or near the poverty line in states that refuse to expand Medicaid. And in most of those states, those people will disproportionately be black or Hispanic.

Medicaid expansion is more than just another battle over the size of government. It's also about the struggle against racial inequality, in the face of competing priorities such as fighting deficits. Pretending not to see the racial component of the Medicaid debate won't make it go away.

(Christopher Flavelle is a member of Bloomberg View's editorial board. Follow him on Twitter.)