Report: Regardless of ACA Expansion, States’ Medicaid Costs To Grow
Although states' Medicaid spending will increase under the Affordable Care Act, the program's expansion accounts for only a small portion of those costs, according to a report by the Kaiser Family Foundation, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 11/26).
According to the report, states will spend an additional $76 billion and the federal government will spend an additional $952 billion over the next decade if every state expands Medicaid eligibility to people at or below 138% of the federal poverty level in 2014 (Kliff, "Wonkblog," Washington Post, 11/26).
If all states participate, the report estimates that 21.3 million U.S. residents would gain Medicaid coverage by 2022 (KFF release, 11/27).
Meanwhile, even if no state opts into the expansion, Medicaid enrollment will still rise, in large part because those who are currently eligible but not enrolled will join the program. KFF estimates that Medicaid enrollment would still grow by 5.7 million over 10 years. As a result, states will spend $68 billion more and the federal government will spend $152 billion more over the next 10 years on Medicaid.
The additional $8 billion in spending if every state participates in the expansion comes from when federal assistance for the Medicaid expansion begins to phase out, dropping to 95% in 2017 and remaining at 90% after 2020. That extra spending will not be distributed evenly. States with the smallest Medicaid programs would see their costs increase the most because they would undergo the largest expansions ("Wonkblog," Washington Post, 11/26).
A dozen states would see their Medicaid spending increase between 4% and 7% over the next decade because their current eligibility standards are more restrictive than the minimum set under the ACA (Galewitz, "Capsules," Kaiser Health News, 11/26). For example, Texas -- the state with the highest rate of uninsured residents -- would spend 6% more on its Medicaid program to cover 2.4 million additional beneficiaries (Alonso-Zaldivar, AP/U-T San Diego, 11/26).
Alan Weil, executive director of the National Academy for State Health Policy, said that even a 1% increase in spending is significant for some states. "A lot of states are still digging their way out of the fiscal downturn," he said ("Capsules," Kaiser Health News, 11/26).
On the other hand, states that participate in the expansion will save $18 billion on uncompensated care costs. Some states -- including Massachusetts, New York and Wisconsin -- would see a decrease in state Medicaid spending because they already provide broad coverage and would benefit from federal funding (AP/U-T San Diego, 11/26).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.