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Arkansas Shows Why Medicaid Expansion Is a Good Deal for States

Critics who claim that their state can’t afford health reform’s Medicaid expansion should look at a new study from Arkansas’ Department of Human Services, which estimates that the expansion would produce more than $350 million in net savings for the state between 2014 and 2025 (see graph).

As we’ve explained, the Medicaid expansion is a good deal for states not just because the federal government will pick up the vast bulk of the costs, but also because expanding health coverage will save states money on health care for the uninsured.

Critics tend to focus on (and often exaggerate) the various costs that the expansion would impose on states while ignoring the various ways in which it would save states money.  Needless to say, you need to factor in both to understand the real impact on a state’s budget.

That’s what the Arkansas study does, and the results support what a task force convened by former New York Lieutenant Governor Richard Ravitch and former Federal Reserve Chairman Paul Volcker says in its new report on states’ long-term budget issues:  “For states that want to increase coverage for the uninsured, [health reform] is a bargain.”