Study: Medicaid expansion cost modest

Nov. 26, 2012 at 10:25 PM

MENLO PARK, Calif., Nov. 26 (UPI) -- Healthcare reform would result in state Medicaid spending to rise less than 3 percent from 2013 to 2022, U.S. researchers say.

A report by the Henry J. Kaiser Family Foundation and the Urban Institute said a central goal of the Affordable Care Act was to significantly reduce the number of uninsured by providing a continuum of affordable coverage options via Medicaid and new Health Insurance Exchanges.

States face a decision about whether to adopt the Medicaid expansion.

An analysis used the Urban Institute's Health Insurance Policy Simulation Model to provide national as well as state-by-state estimates of the impact of the act on federal and state Medicaid costs, Medicaid enrollment and the number of uninsured, the researchers said.

The analysis showed the impact of the Medicaid expansion under the act would vary across states based on current coverage levels and the number of uninsured.

"If all states implement the ACA Medicaid expansion, the federal government will fund the vast majority of increased Medicaid costs. The Medicaid expansion for the federal government would be would increase by $952 billion from 2013 to 2022," the report said.

The number of uninsured would be cut by 48 percent.

States as a whole are likely to see net savings from the Medicaid expansion -- combining Medicaid costs with a conservative estimate of $18 billion in state and local non-Medicaid savings for uncompensated care -- care provided in hospitals for those uninsured, the report said.

The Medicaid expansion would save states a total of $10 billion during the 2013 to 2022 period, compared to the ACA implemented without the expansion, the report said.

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