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Expanding Medicaid in Pennsylvania would increase federal revenue to the state, study finds
Date:3/28/2013

Expanding Medicaid in Pennsylvania under the Affordable Care Act would boost federal revenue to the state by more than $2 billion annually and provide 340,000 residents with health insurance, according to a new RAND Corporation study.

The increased federal spending on health care in Pennsylvania would provide a $3 billion boost in economic activity and sustain more than 35,000 jobs, according to the analysis.

But the expansion of Medicaid would not be without cost. Expanding Medicaid would require an additional $53 million in state spending in 2014, with the cost rising to $611 million in 2020 as the federal government trims its support for the Medicaid expansion.

"The expansion of Medicaid in Pennsylvania increases health care coverage, net federal inflows, economic growth and employment compared to not expanding Medicaid, but requires a net increase in state spending beginning in 2017," said Carter Price, the study's lead author and a mathematician at RAND, a nonprofit research organization. "Our findings may help policymakers decide whether the benefits are worth the cost."

Researchers from RAND and the University of Pittsburgh Graduate School of Public Health used the RAND COMPARE microsimulation model to estimate the effect of the federal Affordable Care Act on health insurance coverage and federal spending in Pennsylvania, both with and without expansion of Medicaid. Researchers also estimated the broader economic effects of the Affordable Care Act on the state.

The project was sponsored by the Hospital & Healthsystem Association of Pennsylvania.

Researchers found that under the federal Affordable Care Act, the proportion of uninsured people in Pennsylvania will drop from 13 percent of the population to 8 percent. Expanding Medicaid in the state would further cut the proportion of uninsured residents, down to 5 percent.

Federal payments into Pennsylvania in 2014 for health programs are estimat
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Contact: Warren Robak
robak@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

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