States that have expanded Medicaid under the federal Affordable Care Act are saving millions of dollars, while providing health care access to previously uninsured people and growing jobs in the health care industry, a new report from the Robert Wood Johnson Foundation revealed this week.
“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 (in future years),” the report states. “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.”
Wednesday is the federal health care law’s six-year anniversary, but former Gov. Bobby Jindal, a Republican, steadfastly opposed the optional Medicaid expansion that it provided during his time in office.
Gov. John Bel Edwards, a Democrat who was sworn in on Jan. 11, has since directed the Department of Health and Hospitals to begin the process.
Louisiana residents who would benefit from Medicaid expansion will get a chance to sign up beginning in June. Medicaid expansion is expected to take effect July 1.
Adults who make up to 138 percent of the federal poverty level — about $33,460 for a family of four — would become eligible, and the federal government will cover 100 percent of the costs through next year. The federal share will gradually reduce to 90 percent by 2020.
The federal government currently pays about 62 percent of Louisiana’s Medicaid costs.
Edwards, during his recent State of the State address, said the state will save $100 million dollars in the first year of expansion.
But opponents of the federal health care law have questioned how much states would save in the long-run when the state begins paying a portion of the costs. Edwards’ administration has recently embraced some Medicaid changes that would affect the entire program, including co-payments, that are backed by conservative legislators.
“We can improve our Medicaid program and require personal responsibility for health by charging copays, providing premium assistance, requiring work referrals and promoting healthy behaviors,” Edwards said in his speech that kicked off the start of a three-month legislative session. “We save money, promote individual responsibility and achieve better health outcomes.”
The latest report from the Robert Wood Johnson Foundation, which is an update of its report last year, found that states that expanded Medicaid and brought in the higher match rate after formerly paying a higher share of covering health care for the poor, including pregnant women and children and high-need populations, brought in more federal money to offset state costs.
States also saved money on programs for the uninsured and brought in more revenue from existing insurer and provider taxes, the report found.
In some states, the researchers found that the combined budget savings would offset the cost of expanding Medicaid through 2021 as the state’s match ticks up.
“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,” foundation Vice President Dr. John Lumpkin said in a statement Tuesday.
The report notes that women who enroll in Medicaid and later become pregnant would stay on the expansion program, rather than the more costly current program.
Arkansas saved $15.2 million that way, about a 50 percent decrease in spending on the program for pregnant women.