Center on Budget and Policy Priorities cbpp.org Medicaid Expansion and State Budgets Progressive States Network Medicaid Expansion Webinar July 17, 2011 January Angeles Senior Policy Analyst Center on Budget and Policy Priorities

cbpp.org ACA Provides a Generous Federal Match for Expanding Medicaid 100 percent federal match the first 3 years Phases down over time but never less than 90 percent YearsFederal Matching Rate 2014 – % % % % 2020 and beyond90%

Center on Budget and Policy Priorities cbpp.org Federal Government Will Bear Nearly All Costs of the Expansion From , if all states expand: – States spending: $73 billion – Federal spending: $931 billion

Center on Budget and Policy Priorities cbpp.org If all states expand, ACA and Medicaid Expansion Will Raise State Spending by Only 2.8 Percent

Center on Budget and Policy Priorities cbpp.org Key Considerations for Estimating Costs and the Budget Process Assumptions will significantly affect the bottom line – transparency is key States will incur costs of covering those currently eligible but not enrolled regardless of expansion decision Additional cost of expansion is very minimal, especially in context of 1-2 year budget window Savings will occur inside and outside the Medicaid budget

Center on Budget and Policy Priorities cbpp.org Costs Associated with Increased Medicaid Enrollment Coverage of newly eligible Coverage of eligible but not enrolled Administration

Center on Budget and Policy Priorities cbpp.org Savings Within and Outside of Medicaid that Should Be Accounted for Transitioning some currently eligible populations into newly eligible group (e.g., adults enrolled through waivers, medically needy spend down) Reductions in state and local spending for the uninsured (e.g., uncompensated care, mental health care) Other revenue gains (e.g., provider and insurance taxes)

Center on Budget and Policy Priorities cbpp.org Key Financial Benefits of Expanding Medicaid Provides a way to cover lowest-income residents, with costs mostly borne by the federal government Allows for state and local government savings on uncompensated care and other services for the uninsured Additional federal dollars coming into the state will provide boost to state economy

Center on Budget and Policy Priorities cbpp.org Resources Medicaid Expansion: Framing and Planning a Financial Impact Analysis, Prepared by: Manatt Health Solutions; Center for Health Care Strategies; State Health Access Data Assistance Center Medicaid Coverage and Spending in Health Reform: National and State-by-State Results for Adults at or Below 133% FPL, The Urban Institute/Kaiser Family Foundation Making the Medicaid Expansion an ACA Option: How Many Low-income Americans Could Remain Uninsured, The Urban Institute Consider Savings as Well as Costs, The Urban Institute