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In response to "I ask this question out of naivete, not out of making a political point" by Strongbad

See mara's post below. And you should read spamlet's post from earlier today. Short answer, the federal government made money available to states to

expand medicaid to insure more people (100% of the cost for the first 3 years and 90% of the cost after that). Some states opted not to take the money.

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