Federal Government Will Pick Up Nearly All Costs of Health Reform’s Medicaid Expansion

[ProSense]

Federal Government Will Pick Up Nearly All Costs of Health Reform’s Medicaid Expansion

By January Angeles and Matt Broaddus

Claims that states will bear a significant share of the costs of the Affordable Care Act’s (ACA) Medicaid expansion — and that this will place a heavy financial burden on states — do not hold up under scrutiny. Congressional Budget Office (CBO) analysis indicates that between 2014 and 2022, the ACA’s Medicaid expansion will add just 2.8 percent to what states spend on Medicaid, while providing health coverage to 17 million more low-income adults and children. In addition, the Medicaid expansion will produce savings in state and local government costs for uncompensated care, which will offset at least some of the added state Medicaid costs.

The health reform law requires states to extend Medicaid coverage to non-elderly individuals with incomes up to 133 percent of the poverty line, or about $30,700 for a family of four. The combination of the law’s Medicaid expansion and its subsidies to make coverage affordable for people who aren’t affluent but have incomes too high to qualify for Medicaid will reduce the number of uninsured people by 33 million by 2022, according to CBO.

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In short, the Medicaid expansion will significantly increase coverage at a modest cost to state Medicaid programs, and it will lower state costs for providing care to the uninsured.

Federal Government Will Assume 93 Percent of Expansion Costs Over 2014-2022

Starting on January 1, 2014, the health reform law will expand Medicaid eligibility to 133 percent of the poverty line for all non-elderly citizens and individuals who have lawfully resided in the United States for more than five years, and who are not eligible for Medicare. Millions of low-income parents and people with disabilities, and millions of non-disabled low-income adults who don’t have dependent children, will become eligible for the program. CBO estimates that by 2022, some 17 million more individuals — most of whom are now uninsured — will have insurance through Medicaid and the Children’s Health Insurance Program (CHIP).[1]

Since its inception, Medicaid has been jointly financed by the federal government and the states, with the federal government currently paying 57 percent of the cost, on average. The health reform law takes a different approach. To minimize the financial burden on states of the Medicaid expansion, the federal government will pay nearly 93 percentof the cost of expanding Medicaid over the next nine years.

Specifically, the federal government will assume 100 percent of the Medicaid costs of covering newly eligible individuals for the first three years that the expansion is in effect (2014-2016).[2] Federal support will then phase down slightly over the following several years, and by 2020 (and for all subsequent years), the federal government will pay 90 percent of the costs of covering these individuals. According to CBO, between 2014 and 2022, the federal government will pay $931 billion of the cost of the Medicaid expansion, while states will pay roughly $73 billion, or 7 percent (see Figure 1).[3]

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http://www.cbpp.org/cms/index.cfm?fa=view&id=3161

In response to a question by Tom Hartmann, I just heard Bernie Sanders reiterate that RW Republicans are already claiming that Medicare and Medicaid are unconstitutional.

In the context of recent hearings in the House, moves by Rick Perry, and Paul Ryan's plan to block grant Medicaid, it's clear that Republicans are targeting the program.

Texas Medicaid Director: 91 Percent Of Texans Will Have Insurance If State Implements Obamacare
http://www.democraticunderground.com/1002360864

Kay Bailey Hutchison Defends Planned Parenthood, Says Organization Provides Critical Preventive Care
http://www.democraticunderground.com/1002455452

It also appears that the SCOTUS could weigh in on the GOP's side.

Supreme Court Justices Will Determine the Fate of AIDS in America
http://www.democraticunderground.com/1002496019

The Nightmare Scenario: Supreme Court Guts Medicaid and Guarantees the Private Insurance Monopoly
http://www.democraticunderground.com/1002495928

And a theory:

Could Republican opposition to the mandate be a cover for dismantling the health care law?
http://www.democraticunderground.com/1002495048

[Major Hogwash]

1. It's incredible what the Republicans will lie about these days.

Tomorrow they will claim that it is the Democrats that are anti-social security and anti-Medicare and anti-Medicaid.

[banned from Kos]

3. They lie constantly but Medicaid will still cost taxpayers money - just on the federal side

for the most part.

The real problem will be physicians who take Medicaid. Many now won't. I have not seen this issue discussed.

[ProSense]

4. Regardless of

"The real problem will be physicians who take Medicaid. Many now won't. I have not seen this issue discussed."

...the program, this is always a complaint. Still, it has nothing to do with expanding Medicaid to provide coverage for more people.

[Mojorabbit]

6. It will be a huge influx of people into the medical system

and that system is not set up yet to handle it. Almost all docs limit the amt of medicaid patients they see because the reimbursement is so low. It costs more to see them thanthey are reimbursed once staff salaries and overhead are factored in.

[freshwest]

2. +1

[ProSense]

5. Might as well

add this here: