Healthcare Business News

Medicaid expansion won't sock states: Kaiser

By Melanie Evans
Posted: May 26, 2010 - 1:15 pm ET

States would bear a small fraction of the cost of significant Medicaid expansion for adults under health reform, with the largest gains in coverage and federal spending occurring in states with low coverage levels and higher numbers of uninsured, the Kaiser Commission on Medicaid and the Uninsured said in newly released state-by-state estimates.

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Medicaid expansion would add 15.9 million people to the safety net insurer's rolls by 2019, but state spending will grow by 1.4% during the same period. The projection, the more conservative of two released by the health policy organization, said state Medicaid spending would be roughly $21.1 billion more than it would have been without reform.

The federal government would finance the remaining $443.5 billion under health reform provisions that provide significant financial aid to states for Medicaid expansion. States will gradually shoulder a share of the expansion costs, but not until 2016 and not more than 10% before 2020.

Under a more aggressive projection, Medicaid enrollment would increase by 22.8 million and the number of uninsured would drop by 17.5 million. States would cover 2.9% of the increased spending, or $43 billion. Federal spending would grow by $532 billion between 2014 and 2019.

John Holahan, director of the health policy center for the Urban Institute and an author of the study, said the research excluded potential savings to state subsidies for care for the uninsured, which would likely offset additional spending for adults newly enrolled under Medicaid expansion, he said. “Every single state and many localities now spend a fair amount of money to provide for the uninsured,” he said. “Much of the need to do that will go away.”



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