States that expand Medicaid will see their state Medicaid costs grow at a slower rate than states that do not participate in the expansion. This is the conclusion of an ambitious survey from the Kaiser Commission on Medicaid and the Uninsured this week.
Based on an extensive review of state Medicaid data, the Kaiser Commission estimates state Medicaid spending will grow by about 4.4 percent in states that extend Medicaid to low-income adults and 6.1 percent in states that do not.
This is largely because the 100 percent federal funding for the expansion minimizes state costs for enrolling more people in Medicaid. Meanwhile states that expand Medicaid benefit from savings in other areas of their budgets, such as mental health care, medical care for state prisoners and uncompensated care for the uninsured.
States that do not expand Medicaid are likely to see some growth in enrollment even without the expansion as rules requiring people to have insurance or pay a penalty kick in. Those costs, however, will not qualify for the 100 percent federal funding because they involve adding people eligible for the existing Medicaid program.
The report highlights several state trends in Medicaid spending, enrollment and policy initiatives for FY 2013 and FY 2014. Among the findings:
- Medicaid enrollment is expected to grow in all states in 2014 under the Affordable Care Act regardless of whether they participate in Medicaid expansion.
- States that take the federal funding to cover the expansion population will increase their total Medicaid spending (federal + state) by about 13 percent — but most of that is federal funding.
- Nearly all states are developing and implementing payment or delivery system reforms designed to improve quality and manage costs.
- Forty-five states are involved in some sort of eligibility or enrollment enhancements for FY 2014, with many of those changes involving efforts to streamline enrollment processes beyond those changes already required by the Affordable Care Act.