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Expanding Medicaid is best financial option for states, study finds
Date:6/7/2013

States that choose not to expand Medicaid under federal health care reform will leave millions of their residents without health insurance and increase spending, at least in the short term, on the cost of treating uninsured residents, according to a new RAND Corporation study.

If 14 states decide not to expand Medicaid under the Affordable Care Act as intended by their governors, those state governments collectively will spend $1 billion more on uncompensated care in 2016 than they would if Medicaid is expanded.

In addition, those 14 state governments would forego $8.4 billion annually in federal payments and an additional 3.6 million people will be left uninsured, according to findings published in the June edition of the journal Health Affairs.

"Our analysis shows it's in the best economic interests of states to expand Medicaid under the terms of the federal Affordable Care Act," said Carter Price, the study's lead author and a mathematician at RAND, a nonprofit research organization.

"States that do not expand Medicaid will not receive the full benefit of the savings that will result from providing less uncompensated care," Price said. "Furthermore, these states will still be subject to the taxes, fees and other revenue provisions of the Affordable Care Act, without reaping the benefit of the additional federal spending which will costs those states economically."

Price and study co-author Christine Eibner used the RAND COMPARE microsimulation model to estimate the likely effects if 14 states choose not to expand Medicaid under federal health care reform. Among the measures studied are the impacts of Medicaid expansion on insurance coverage, federal payments into the states and state spending on care for the uninsured.

The states studied are Alabama, Georgia, Idaho, Iowa, Louisiana, Maine, Mississippi, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas and Wisconsin. Alth
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Contact: Warren Robak
robak@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

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