New Arkansas Study Says Medicaid Expansion Would Save State $350 Million

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"New Arkansas Study Says Medicaid Expansion Would Save State $350 Million"

The Center on Budget and Policy Priorities today pointed out a new study from Arkansas’ Department of Human Services, which found the expansion of Medicaid in health reform would save the state $350 million between 2014 and 2025. This stands in stark contrast to an earlier estimate from the state that participation in the reform law would cost it over $800 million over roughly the same period.

Arkansas’ new estimate does fall in line with a recent Urban Institute study which offered an optimistic prediction of $362 million in savings for the state between 2014 and 2019, and a pessimistic prediction of $7 million in new costs. As the new Arkansas study covered a ten-year period from the same start date, it would seem to fall right down the middle of the Urban Institute’s estimates. Critics of health care reform’s Medicaid expansion — as well as governors in both parties — have pointed to concerns about budgetary effects as a justification for states to opt out of the expansion.

Nor is Arkansas the only state to walk back initial estimates of how much the expansion would cost. After Texas Governor Rick Perry declared his state would sit out the expansion, Texas’ health and human services commissioner downgraded the state’s estimate from $27 billion over ten years to $16 billion. That remains well high of the Urban Institute’s pessimistic estimate of $2.4 billion over five years, and certainly high of its optimistic estimate of $554 million in savings.

The expansion of Medicaid in health reform would cover almost 16 million currently uninsured Americans. Almost 4 million of those Americans reside in the six states that have already said they won’t participate.

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