What Health Reform Means for the States

This is Lanhee J. Chen, writing for the Heritage Foundation:

Several states have initiated their own estimates of Patient Protection and Affordable Care Act’s (PPACA) impact. Texas recently concluded that the Medicaid expansion may add more than two million people to the program and cost the state up to $27 billion in a single decade. The Florida Agency for Health Care Administration estimated in April 2010 that PPACA’s Medicaid expansion would require an additional $5.2 billion in spending between 2013 and 2019, and more than $1 billion a year beginning in 2017. In California, the Legislative Analyst’s Office concluded that PPACA’s Medicaid expansion will likely add annual costs to the state budget in “the low billions of dollars.”

Mississippi, Indiana, and Nebraska each retained Milliman, Inc., a national health care econometrics firm, to perform a fiscal analysis of the Medicaid expansion on their states’ budgets. For Mississippi, Milliman estimates that between 206,000 and 415,000 people will be added to Medicaid with a 10-year impact on the state budget of between $858 million and $1.66 billion. The seven-year cost of the Medicaid expansion in Indiana is estimated to be between $2.59 billion and $3.11 billion, with 388,000 to 522,000 people joining the state’s Medicaid rolls. Finally, Milliman estimates that PPACA will result in nearly one of five Nebraskans being covered by Medicaid, at a cost of $526 million to $766 million over the next decade.

Comments (7)

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  1. Joe S. says:

    I think M&R have it right. It’s going to be bad.

  2. Ken says:

    This is not going to be good. There is an editorial in the WSJ this morning on how the new burdens for the states are unconsitutional.

  3. Stephen C. says:

    What health reform means to the states is more spending wich means higher taxes.

  4. Devon Herrick says:

    There is a new article in the New York Times about CMS providing $205 million in grant money for states to seek out and enroll Medicaid-eligible children who were not enrolled. This segment of the population will be costly once the individual mandate compels everyone to have coverage.

    There are several reasons why Medicaid expansion will cost states more than anticipated. 1) Already eligible but unenrolled individuals will not be reimbursed at the same level as newly eligible enrollees. 2) To insure access to care states will have to raise provider reimbursements to Medicare levels or higher. 3) Most drug rebate programs will not go to the federal government rather than state governments. See my 2-page brief analysis on the subject: http://www.ncpathinktank.org/pub/ba729

  5. Lizzy says:

    Interesting that Alabama gets the lion share of the $206 million bonus Medicaid payments….a total of $55 million while the other $151 mill is divided among 14 other states.

  6. Joe Barnett says:

    Federal Medicaid funds are not now distributed in a rational way. This is going to make the system worse.

  7. Linda Gorman says:

    Colorado officials are estimating a $211 million annual Medicaid increase from ObamaCare in 2014 rising to $725.3 million by 2020. They have tended to underestimate such costs in the past and are already $252 million in the hole if ARRA funding is not continued.

    It would be more but the legislature passed a new (and arguably unconstitutional) tax and expanded Medicaid in the last two years. That generated the $252 million hole, but the expansions would mostly have been required under ObamaCare anyway.

    There is going to be a big tax fight in Colorado as the state is flat out of money after 10 years of spendapalooza politics and the state constitution requires a popular vote on any new taxes.