California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Report Predicts States Will Save Up to $129B by 2019 Under Reform

The federal health reform law will help states save between $92 billion and $129 billion from 2014 to 2019, according to a new report by the Robert Wood Johnson Foundation and the Urban Institute, Fierce Health Finance reports (Shinkman, Fierce Health Finance, 7/12).

According to the report, state spending on new Medicaid beneficiaries will increase by $80 billion. However, that additional spending partially will be offset by an anticipated $66 billion in new federal spending on existing Medicaid enrollees, the report states.

States also will save $69 billion from the elimination of Medicaid eligibility for some U.S. residents with incomes above 138% of the federal poverty line (United Press International, 7/11).

In addition, the federal government might spend as much as an additional $743 billion on Medicaid, a portion of which would offset state expenditures (Fierce Health Finance, 7/12).

Additional savings will come from a 12.5% to 25% reduction on spending for uncompensated care, cutting federal spending by between $39 billion and $78 billion and state spending by between $26 billion and $52 billion.

Expanded mental health coverage also is expected to save states between $11 billion and $22 billion (United Press International, 7/11).

The report notes, "Each state's costs and savings will depend upon its Medicaid eligibility rules, characteristics of its uninsured population and other factors" (Fierce Health Finance, 7/12).

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