Medicaid expansion didn’t cause unexpected state budget problems, study finds

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A study published in Health Affairs Wednesday found the states that expanded their Medicaid programs under the ACA didn’t encounter unforeseen budget problems as a result of the expansion.

Thirty-one states and the District of Columbia have expanded their Medicaid programs under the ACA. To determine the fiscal effects of Medicaid expansion on state budgets, researchers used data from the National Association of State Budget Officers for fiscal years 2010 to 2015.

Medicaid spending increased by 11.7 percent overall in states that expanded their programs, but this spending growth was covered by federal funds. Under the ACA, the federal government paid for 100 percent of the costs for newly eligible Medicaid enrollees from 2014 through 2016 in states that expanded the program.

The researchers also found states didn’t have to take funding away from education or other programs to fund their expanded Medicaid programs.

Since the data used in the analysis was only for years during which the federal government covered up to 100 percent of the cost of expanding Medicaid, the study likely underestimates the budgetary implications of the expansion beginning in 2017. That’s because states become responsible for 5 percent of expansion costs this year, and, absent any legislative changes, will be responsible for 10 percent of costs by 2020.


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