STUDY: Medicaid Expansion Would Extend Coverage To Over 21 Million Americans At Modest Cost To States

According to a new study by the Henry J. Kaiser Family Foundation and the Urban Institute, states fully implementing Obamacare’s Medicaid expansion would result in an additional 21.3 million Americans on insurance rolls while raising states’ Medicaid spending by less than three percent.

Since the federal government will pick up most of the tab for the Medicaid expansion, the states that choose to participate will be able to extend insurance to millions of poor and vulnerable Americans without using much of their own funds. In fact, the study finds that states will receive more than $9 from the federal government for every $1 they invest in their Medicaid programs. And some states — including several whose GOP governors have dug in their heels against reform — would see a net budgetary gain from the expansion through lower uncompensated care costs and a healthier population, as the Huffington Post details:

“By implementing the Medicaid expansion with other provisions of the ACA, states could significantly reduce the number of uninsured,” the Kaiser Family Foundation and Urban Institute study states. “Overall state costs of implementing the Medicaid expansion would be modest compared to increases in federal funds, and many states are likely to see small net budget gains.”

The total cost of the Medicaid expansion would be $1.03 trillion between 2013 and 2022, according to the study. States would pay $76 billion of that, which amounts to a 2.9 percent increase compared to what states would have spent on Medicaid if the health care reform law hadn’t been enacted. Under the health care reform law, the federal government will pay the full cost of covering newly eligible people on Medicaid from 2014 to 2016, then will scale back funding to 90 percent in 2022 and later years.

In addition to receiving a large federal subsidy to enroll these uninsured residents, states that expand Medicaid would be able to reduce spending on taxpayer-funded programs to help hospitals and other health care providers cover the cost of so-called uncompensated care, or unpaid medical bills. If Medicaid expanded across the country, states would save $18 billion between 2013 to 2022, according to the study.

Multiple other studies have shown that states could economically benefit from Obamacare’s Medicaid expansion — not only because of the increased federal funds to help pay for the expansion, but also because extending coverage to previously uninsured Americans will help improve their quality of life and prevent states from absorbing the sticker shock for their unpaid medical bills.

But it’s a moot point for residents in the eight states whose Republican governors have chosen to reject the Medicaid expansion. Among the states that would see a budgetary gain from expanding its Medicaid program is Maine, where GOP Governor Paul LePage has already explicitly refused to participate in the expansion.