Healthcare

Medicaid Expansion Will Cost States Even Less Than Expected

Medicaid

From the Center on Budget and Policy Priorities:

CBO now estimates that the federal government will, on average, pick up more than 95 percent of the total cost of the Medicaid expansion and other health reform-related costs in Medicaid and the Children’s Health Insurance Program (CHIP) over the next ten years (2015-2024).

States will spend only 1.6 percent more on Medicaid and CHIP due to health reform than they would have spent without health reform. That’s about one-third less than CBO projected in February. And the 1.6 percent figure is before counting the state savings that the Medicaid expansion will produce in state expenditures for services such as mental health and substance abuse treatment provided to the uninsured.

The federal government will cover 100 percent of the cost of expanding Medicaid until 2017 and, while it was projected that the government would cover 90 percent of the cost beyond that time period, the Congressional Budget Office (CBO) now projects that the federal government will cover more than 95 percent until at least 2024.

Expanding Medicaid was already a pretty good deal for states given that the federal government will cover the entire cost for several years and the overwhelming majority of costs thereafter, but the deal just got sweeter.

None of this matters to Republican lawmakers in a number of states. They’re still clinging to the idea that expanding Medicaid is a road to ruin.

(ht Steve Okin Attorney at Law)