Friday, December 6, 2013

Expanding Medicaid or Not-the Impact on States

The Commonwealth Fund has released a new issue brief by Dr. Sherry Glied & Stephanie Ma, titled How States Stand to Gain or Lose Federal Funds by Opting In or Out of the Medicaid Expansion.  The abstract for this brief explains: 

While the states’ costs of participating in the Medicaid expansion have been at the forefront of this discussion, the expansion has much larger implications for the flow of federal funds going to the states. This issue brief examines how participating in the Medicaid expansion will affect the movement of federal funds to each state. States that choose to participate in the expansion will experience a more positive net flow of federal funds than will states that choose not to participate. In addition to providing valuable health insurance benefits to low-income state residents, and steady sources of financing to state health care providers, the Medicaid expansion will be an important source of new federal funds for states.

The authors compare (1) anticipated federal dollars in 2022 to states with Medicaid expansion to the highway and defense contract dollars going into the state;  (2) Medicaid dollars to taxes the feds have collected to fund it and (3) the share of the cost for state expansion in 2022 to state spending to bring in private investments.  The findings show that :

Medicaid expansion will be a relatively large source of federal revenue to states [with] the value of new federal funds flowing annually to [participating] states ... in 2022 will be, on average, about 2.35 times as great as expected federal highway funds ... and over one-quarter as large as expected defense procurement contracts to states.

The authors conclude  (p. 4) that there are "direct benefits" as well as a positive impact on the economy and Medicaid expansion may offer significant advantages to a participating state.  There's a nifty infographic available also that shows the costs of rejecting Medicaid expansion in three states: Florida, California and Ohio.

You can register to receive email alerts from the Commonwealth Fund here.

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