CBO Reduces Projections for States’ Medicaid Expansion Costs
The Congressional Budget Office now estimates that states that expand Medicaid under the Affordable Care Act will spend about an additional $46 billion on the program, compared with a February estimate of $70 billion more, the New York Times reports.
According to the Times, CBO did not state the exact reason it reduced its estimate. CBO still expects a significant increase in Medicaid enrollment, but the mix of enrollees might be different than originally expected, the Times reports.
The federal government covers the full costs of enrollees newly eligible for Medicaid because of the ACA expansion from 2014 to 2016, and then states' share will gradually rise until it reaches 10% in 2020. However, states still are responsible for between 27% and 50% of the costs of individuals who were eligible for the program prior to the expansion (Pear, New York Times, 4/23).
According to Edwin Park, an analyst with the Center for Budget and Policy Priorities, CBO cost projections were lowered because the agency now expects fewer individuals who were eligible for Medicaid prior to the ACA -- but were not enrolled -- to sign up for coverage through the program, CQ HealthBeat reports.
Will the Updated Estimate Affect Undecided States?
According to CQ HealthBeat, it remains unclear if CBO's lowered cost projections will affect states currently debating whether or not to expand their Medicaid programs. Twenty-six states already have expanded Medicaid, but the other states remain undecided or are strictly against expansion.
Matt Salo, executive director of the National Association of Medicaid Directors, said, "There are many factors involved in the remaining state decisions about whether to expand Medicaid, political, philosophical, ideological, as well as fiscal." He added, "A rosier outlook from CBO may encourage some, but I'm not sure it moves the needle much for most states that are currently in the 'no' column" (Reichard, CQ HealthBeat, 4/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.