States examine costs of health law's Medicaid expansion detailed in new report

May 28 2010

Reuters examines how Medicaid expansion might affect various states, with new findings from the Kaiser Commission on Medicaid and the Uninsured: "Under conservative estimates, Maine's Medicaid spending will decrease 1.5 percent and Colorado's will slip 0.5 percent, according to the study. Massachusetts and Vermont, which established their own health plans, will spend 2.1 percent and 0.6 percent less, respectively."

"When healthcare reform was working its way through Congress in November, California's chief deputy director of health care programs said the state could not afford its current Medicaid program -- let alone an expansion. California will have the most new enrollees, at least 2.01 million people through 2019, according to the Kaiser study. Still, the most populous state will have to pay only 1.5 percent more for Medicaid, while federal spending there on the program will rise at least 23 percent. ... Oregon will experience the largest jump in federal spending on Medicaid -- 51 percent. Meanwhile, Mississippi will have the biggest increase in state spending at 5 percent" (Lambert, 5/26).

Kansas Health Institute: "According to the report, Kansas by 2019 would see an increase in new Medicaid enrollees ranging from 143,445 to 192,006 people, depending on how aggressively state officials and others promote enrollment. If enrollment increased by the higher number, the cost between 2014 and 2019 would be $4.2 billion of which the federal government would absorb about 94 percent. The state's share would be about $260 million over the same period. By 2019, after federal reform aid is scheduled to recede, Kansas could expect a 2.6 percent increase over its projected Medicaid spending had the reform not become law, according to the report. Currently, about 335,000 Kansans are thought to be without health insurance" (5/26).

Health News Florida: "As Republican leaders offer dire warnings about states' cost burden under federal health reform, a new report says moving nearly 1 million Floridians into the Medicaid system would dramatically reduce the number of uninsured people in the state --- with Washington picking up most of the tab. The report ... estimates Florida will gain 951,622 additional Medicaid enrollees by 2019 because of federal health reform and that the number could go as high as 1.37 million if the state and other agencies aggressively try to sign up people. It says the lower enrollment estimate would cost the state $1.2 billion by 2019," while the federal government would pay about $20 billion. "The report is relatively upbeat about the funding of the program, a marked contrast to the arguments of Florida Republicans, who say expanded Medicaid requirements will eat an ever-growing hole in the state budget" (Saunders, 5/26).

Fort Worth Star Telegram: "Texas stands to benefit more than most states from the federal healthcare overhaul, potentially slashing its population of uninsured adults while the federal government pays most of the costs, according to a report released Wednesday. The state could add up to 2.5 million adults to its Medicaid rolls by 2019 ... Because of high federal match rates for the newly eligible, the state would pay less than $5 billion in additional costs from 2014 to 2019, the foundation reported. That is significantly lower than the $25 billion that state officials, who have filed a lawsuit to stop the reform measures, have predicted that Medicaid expansion would cost the state" (Branch, 5/26).

Dallas Morning News: "'For a relatively small investment of state dollars, states could see huge returns -- with federal dollars covering the bulk of the bill,' said Diane Rowland, who heads the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, which sponsored the study. For example, compared with what would have happened to our state's Medicaid program if the federal law hadn't been passed, 'Texas could see an increase in enrollment [by impoverished adults] of 46 percent but an increase in state spending of about 3 percent,' said researchers John Holahan and Irene Headen of the Urban Institute, who did the study for the foundation. Federal spending in Texas, meanwhile, probably will increase by 39 percent over levels that could've been expected without the federal overhaul, they said" (Garrett, 5/26).

San Jose Mercury News: "The law will expand the federal health care program for the poor (known as Medi-Cal in California), to those earning up to 133 percent of the federal poverty line, or $14,400 for an individual. Medi-Cal rules vary, but generally they cover families who make up to 106 percent of the poverty level. During the health care debate, Gov. Arnold Schwarzenegger estimated the new law would impose additional costs of $2 billion to $3 billion annually on California once it is fully implemented late this decade. The Kaiser/Urban Institute report did not offer a comparable annual figure. But it estimates that from 2014 to 2019, as the reform law is ramping up, California could bear additional costs from $3 billion to $6.5 billion over that six-year period. The range depends on the percentage of people who end up enrolling in the program" (Zapler, 5/26).

Louisville Courier-Journal: "Indiana's Medicaid costs could increase by as much as 5 percent because of the federal health care overhaul. ... That spending will result in a much bigger increase in the number of Hoosiers on Medicaid -- a jump of between 29 percent and 42 percent -- because the federal government is picking up most of the additional cost for the required expansion. ... Still, the additional cost to Indiana could be between $478 million and $899 million between 2014 and 2019" (Groppe, 5/26).

The (Tennessee) Jackson Sun: "Five years into the recently passed health care reform law Tennessee could have nearly a half million more residents on Medicaid, according to a report released today. And the state could be paying an extra $1.5 billion for those services over five years, the Kaiser Family Foundation report estimates. ... The report estimated that under normal participation rates Tennessee would add 330,932 new enrollees as of 2019 at a cost of $716 million for the years 2014-2019" (Theobald, 5/26).

(KHN is an editorially independent program of the Kaiser Family Foundation.)