A new report by the Kaiser Family Foundation claims federal Medicaid spending would increase by $472 billion over the next nine years if the 21 states that have not expanded Medicaid were to do so.
The April 29 report also finds 4.3 million fewer people would be uninsured, leading to lower spending on uncompensated healthcare. In 2013, 30 percent of those uninsured paid for the care themselves, while 70 percent of healthcare expenditures went uncompensated. Based on these findings, Kaiser estimates that between 2015 and 2024, uninsured people in states not expanding Medicaid would add up to $266 billion in uncompensated care.
Were these states to expand Medicaid, the amount of uncompensated care would fall to $185 billion, the report stated.
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An estimated 24 percent of uncompensated care is funded by state and local governments, according to the report. While it does not attempt to assess the overall effect of Medicaid expansion on state budgets, overall, expansion would help, not hurt, budgets over a multi-year period beyond 2016, it stated.
Three states would see increases in Medicaid enrollment of 50 percent or more: Idaho, Texas and Kansas. Six states would see their uninsured populations reduced by about 40 percent: Maine, South Dakota, Mississippi, Alabama, Louisiana and Missouri.
Had the Affordable Care Act not become law, 22.2 million people would be uninsured in 2016 in the 21 states that have not expanded. With the ACA, that number is reduced to 14.1 million. Were these states also to expand Medicaid, the number of uninsured would decline to 9.8 million, according to Kaiser estimates.
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In June 2012, the Supreme Court ruled that states could choose whether or not to accept the Affordable Care Act’s expansion of Medicaid eligibility. Thirty states and the District of Columbia have adopted Medicaid expansion. Montana is the most recent state to be added the list of states adopting expansion. The expansion in Montana requires federal waiver approval to be implemented. Five states have the issue under discussion and 16 states have chosen not to adopt expansion.
Should the 21 states that have not expanded Medicaid as of April 2015 were to do so they would spend $38 billion more on Medicaid from 2015 to 2024 but the savings on reduced uncompensated care would offset between 13 and 25 percent of that additional state spending, according to the report.
Some states that have not adopted expansion point to the cost of covering additional individuals after the federal government stops paying 100 percent of the cost. For those that expand, the federal government pays 100 percent of the Medicaid costs of those newly eligible until 2016. The federal share gradually phases down to 90 percent in 2020 and remains at that level thereafter.
Twitter: @SusanMorseHFN