The more than two dozen states that have expanded Medicaid eligibility under the Affordable Care Act (ACA) are apparently reaping extensive financial gains from doing so, according to a new policy brief published by the Robert Wood Johnson Foundation (RWJF) on behalf of Manatt Health Solutions.
Medicaid expansion has been one of the ACA's most contentious points of debate after the U.S. Supreme Court ruled in 2012 that it was an optional policy. Some 20 states, virtually all with Republican-controlled legislatures, have refused to expand Medicaid, saying it is too costly and that federal funding of the program for the long-term remains unclear. As a result, the rates of uninsured vary significantly between states that chose to expand Medicaid and those that did not. And hospitals in states that expanded Medicaid also have a lower uncompensated care burden than in non-expansion states.
The study examined eight states that chose to expand Medicaid--Arkansas, Colorado, Kentucky, Michigan, New Mexico, Oregon, Washington and West Virginia. It concluded those states have enjoyed a financial benefit of $1.8 billion, a mixture of fewer budget expenditures and additional revenue.
Some of the states have experienced a significant financial benefit. Michigan is projected to reap $389 million in savings by replacing general funds it spends on the uninsured with Medicaid funds. Washington is projected to save $342 million through the end of this year due to federal matching funds from the Medicaid program. New Mexico will receive an additional $60 million in total additional revenue in 2014 and 2015 combined as the result of increased assessments on providers and health plans that are based in part on the number of Medicaid enrollees.
"As a result of Medicaid expansion, states have seen budget savings and revenue gains without reducing services. In some states, budget savings could offset the cost of expanding Medicaid through 2021," the report concluded in its summary statement.