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Medicaid Expansion and State Budgets

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

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  1. 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

  2. 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

  3. 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

  4. If all states expand, ACA and Medicaid Expansion Will Raise State Spending by Only 2.8 Percent

  5. 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

  6. Costs Associated with Increased Medicaid Enrollment • Coverage of newly eligible • Coverage of eligible but not enrolled • Administration

  7. 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)

  8. 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

  9. 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

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