Posted on August 24, 2011 15:44
Categories: State and Local | Medicaid
Topics: Cost-effectiveness | Health Care Reform | Medicaid | Spending | State Data
On July 11, the Robert Wood Johnson Foundation (RWJF) published a brief examining state costs under the national health care reform law. Citing health reform’s health coverage expansion and increased federal financing for formerly state-funded functions, the authors estimate that, between 2014 and 2019, states will spend up to $129 billion less than they would have without reform. Over the same period, the brief estimates that the law will reduce overall spending on uncompensated care by 12.5 to 25 percent, saving the federal government $39 billion to $78 billion, while saving states $26 to $52 billion. The authors estimate that states will be responsible for $14 billion in new Medicaid spending to cover the costs of newly eligible Medicaid enrollees. The report also projects that expanding Medicaid coverage for individuals with mental illnesses will save states up to $22 billion through 2019.
From the report:
Many observers have tried to estimate the fiscal effects of the Patient Protection and Affordable Care Act (ACA) on states. Various estimates have focused on the state Medicaid costs that will result from increased enrollment. Some have noted the cost effects of various possible state policy choices, such as a state decision to retain increased Medicaid payment rates for certain primary care providers after additional federal funding for that increase ends in 2015. Relatively few have sought to compare both the costs and savings that states could realize under the ACA. Most studies in the latter category have found that, as a whole, states are likely to come out ahead.
Full report: Timely Analysis of Immediate Health Policy Issues (PDF | 458 KB) 
Robert Wood Johnson Foundation and The Urban Institute. (2011). Timely analysis of immediate health policy issues. Buettgens, Matthew.
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