Senior Policy Analyst
Republican members of Congress released a report today that grossly exaggerates the cost to states of the health reform law’s Medicaid expansion.
As I’ve explained, health reform’s Medicaid expansion is a good deal for states. Under the Affordable Care Act, Medicaid and the Children’s Health Insurance Program will cover an estimated 18 million more low-income adults and children than they do today, most of whom are now uninsured. The federal government will pay 92 percent of the cost of this expansion through 2021. The cost to states over this period will be $60 billion — just 2.6 percent more than what they would have spent on Medicaid without health reform. (See graph.)
The Republican report claims that the actual cost will be $118 billion through 2023. But it accomplishes this by cherry-picking worst-case scenarios from various studies that use different time frames and rely on flawed assumptions:
The health reform law, by dramatically shrinking the ranks of the uninsured, will lighten the burden on states of providing health care to their uninsured residents. Recent analysis by the Kaiser Commission on Medicaid and the Uninsured found that the various estimates of state Medicaid costs under health reform don’t adequately take these savings into account, which could be quite substantial. In fact, analysts from the Urban Institute have pointed out that the reductions in state costs in caring for the uninsured could more than offset the state costs of expanding Medicaid.