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Medicaid Expansion and State Budgets. January Angeles Senior Policy Analyst Center on Budget and Policy Priorities. Progressive States Network Medicaid Expansion Webinar July 17, 2011. ACA Provides a Generous Federal Match for Expanding Medicaid. 100 percent federal match the first 3 years
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Medicaid Expansion and State Budgets January Angeles Senior Policy Analyst Center on Budget and Policy Priorities Progressive States Network Medicaid Expansion Webinar July 17, 2011
ACA Provides a Generous Federal Match for Expanding Medicaid • 100 percent federal match the first 3 years • Phases down over time but never less than 90 percent
Federal Government Will Bear Nearly All Costs of the Expansion • From 2014-2022, if all states expand: • States spending: $73 billion • Federal spending: $931 billion
If all states expand, ACA and Medicaid Expansion Will Raise State Spending by Only 2.8 Percent
Key Considerations for Estimating Costs and the Budget Process • Assumptions will significantly affect the bottom line – transparency is key • States will incur costs of covering those currently eligible but not enrolled regardless of expansion decision • Additional cost of expansion is very minimal, especially in context of 1-2 year budget window • Savings will occur inside and outside the Medicaid budget
Costs Associated with Increased Medicaid Enrollment • Coverage of newly eligible • Coverage of eligible but not enrolled • Administration
Savings Within and Outside of Medicaid that Should Be Accounted for • Transitioning some currently eligible populations into newly eligible group (e.g., adults enrolled through waivers, medically needy spend down) • Reductions in state and local spending for the uninsured (e.g., uncompensated care, mental health care) • Other revenue gains (e.g., provider and insurance taxes)
Key Financial Benefits of Expanding Medicaid • Provides a way to cover lowest-income residents, with costs mostly borne by the federal government • Allows for state and local government savings on uncompensated care and other services for the uninsured • Additional federal dollars coming into the state will provide boost to state economy
Resources • Medicaid Expansion: Framing and Planning a Financial Impact Analysis, Prepared by: Manatt Health Solutions; Center for Health Care Strategies; State Health Access Data Assistance Center • Medicaid Coverage and Spending in Health Reform: National and State-by-State Results for Adults at or Below 133% FPL, The Urban Institute/Kaiser Family Foundation • Making the Medicaid Expansion an ACA Option: How Many Low-income Americans Could Remain Uninsured, The Urban Institute • Consider Savings as Well as Costs, The Urban Institute