States that expanded Medicaid under the Affordable Care Act saw more job growth, lower health inflation and spent less on social and health services unneeded once more residents had medical coverage, a new analysis shows.
A new report issued by the Robert Wood Johnson Foundation said states that opted to expand Medicaid coverage for poor Americans are saving “in many cases, tens of millions of dollars.” Researchers examined savings and increased revenue for 12 states that expanded Medicaid in an update of a report first issued last year.
The report comes six years after President Obama signed into law the Affordable Care Act on March 23, 2010. States that agreed to expand Medicaid began doing so in 2014 and began to see less need for mental and health social programs. They also saw a boost to their economies once federal dollars began to flow from use of healthcare services.
“Evidence from states that have expanded Medicaid consistently shows that expansion generates savings and revenue which can be used to finance other state spending priorities or offset much, if not all, of the state costs of expansion,” says the report, issued by researchers at the consulting firm Manatt Health with funding from the Robert Wood Johnson Foundation. “Medicaid expansion is also bringing hundreds of millions of federal dollars annually to states, which ripples through state economies, creates jobs, and strengthens struggling and rural hospitals.”
In states that expanded, Medicaid spending grew by just 3.4% between 2014 and 2015 while those that did not expand saw spending rise by more than double the rate at 6.9%, researchers said. Expansion states have also seen jobs grow at a higher rate, uncompensated care expenses fall at health facilities and not as many rural hospitals at risk for closure.
There are now 31 states that have opted to expand Medicaid coverage under the law after Louisiana’s new Democratic governor, John Bel Edwards, signed an executive order in January that made the state the 31st plus the District of Columbia to take advantage of a generous federal funding stream to expand Medicaid benefits. the expansion population is funded 100% with federal dollars through the end of this year. The state gradually has to pick up some costs beginning in 2017, but the federal government still picks up 90% or more of Medicaid costs through 2020.
The expansion of Medicaid benefits under the health law has come a long way since the Supreme Court four years ago allowed states to opt out of expanding Medicaid benefits. There were initially only about 20 states that sided with President Obama’s effort to expand the health insurance program for poor Americans.
Most of the states that have opted to expand Medicaid in the last year or so have been led by Republicans, including GOP presidential candidate and Ohio governor John Kasich. Researchers of the foundation’s report indicate non-expansion states are missing out on more than just health benefits for their people.
“States that expanded Medicaid are realizing millions of dollars in savings and new revenue, with the added benefit of thousands of previously uninsured residents gaining coverage and consequently, access to care,” Dr. John Lumpkin, senior vice president at the Robert Wood Johnson Foundation said in a statement accompanying the Manatt report. “As some states continue to debate whether or not to expand, they need only look as far as their neighbors for evidence of the economic benefits that result.”
