Issue Brief , Report , State Materials | Apr 6, 2015

States Expanding Medicaid See Significant Budget Savings and Revenue Gains

Deborah Bachrach, Patricia Boozang, and Dori Glanz, Manatt Health Solutions

As some states continue to debate whether to implement Medicaid expansion under the Affordable Care Act, early results from those that have done so show the impact this decision has had on their state budgets.  States that expanded the number of people eligible for Medicaid are seeing big budgetary savings without reducing services.  This report, prepared by Manatt Health Solutions, analyzes data from eight states, showing $1.8 billion in budget savings by the end of 2015 as a result of Medicaid expansion.  The findings suggest that states expanding Medicaid should expect to see reduced state spending on programs for the uninsured and programs for high-cost patients, savings related to increased federal dollars for newly eligible Medicaid enrollees, and revenue gains related to existing insurer or provider taxes.  In some states, budget savings could offset the cost of Medicaid expansion through 2021.