For each dollar Georgia would have to spend on Medicaid expansion, it would gain $8.68 to $9.42 in federal spending, a new study shows.
The report from the Urban Institute analyzes the potential costs and benefits for the 19 states (including Georgia) that have not expanded Medicaid under the Affordable Care Act.
If all those states expanded Medicaid this year, they could see a collective net increase in federal funding from years 2017 to 2026 of up to $462 billion, versus a cost of $56 billion, the study said.
The authors said that, according to every expansion state that has analyzed the issue, expansion has improved state budgets, despite higher spending in parts of the Medicaid program.
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“It appears that Medicaid expansion is a fiscal win for states,” said Kathy Hempstead of the Robert Wood Johnson Foundation, which funded the study.
The study’s conclusions could help bolster the budding movement for expansion in Georgia.
Georgia’s government — led by Republicans in both the executive and legislative branches — has long opposed expansion, saying it would be too costly for the state.
Support for expansion has shown a bit more traction lately in the General Assembly, but it still faces strong opposition.
A task force formed by the Georgia Chamber of Commerce, meanwhile, is finalizing recommendations for the state to increase access to medical services for the uninsured. The chamber recommendations are expected to focus on a more conservative approach to potential Medicaid expansion than other states have chosen.
The study demonstrates what individual states have already said: State budgets benefit from expansion.
Bill Custer, a health insurance expert at Georgia State University
The extra money from Medicaid expansion largely comes from states getting an enhanced federal match — at least 90 percent — for the population under 138 percent of the federal poverty limit, said Matthew Buettgens, an author of the Urban Institute study.
Bill Custer, a health insurance expert at Georgia State University, said the federal spending boost “is simple math — it’s how the expansion is set up.”
“The study demonstrates what individual states have already said: State budgets benefit from expansion,” he said.
It doesn’t count the economic impact of the extra spending, which will generate economic opportunity and jobs, largely in health care, Custer said.
November election could affect outcome
The Urban Institute report generally did not estimate offsetting state revenue gains and state cost savings, such as increased tax revenues and a higher federal matching rate for some current Medicaid enrollees.
But Buettgens noted that 14 states that have expanded Medicaid have done a comprehensive analysis of the fiscal impact, and they saw net savings, at least in the short term.
The study notes that New Mexico projects net state budget gains until state fiscal year 2020-21, at which point a small net adverse budget impact is anticipated.
The author of the New Mexico analysis noted that his revenue estimates are conservative, the Urban Institute report said.
In Alaska, net state budget losses are forecast starting in federal fiscal year 2017. Alaska does not have sales or individual income taxes, from which the analysis concluded that state general revenue will not be affected by expansion-generated economic activity.
It appears that Medicaid expansion is a fiscal win for states.
Kathy Hempstead of the Robert Wood Johnson Foundation
The new report showed the effect of expansion on uncompensated care.
By expanding Medicaid, the 19 states that have not done so would see an estimated $21 billion to $27 billion drop in uncompensated care spending from 2017 to 2026, Georgia would have a $1.9 billion to $2.4 billion decrease in that spending over that time.
That impact would be felt at the hospital level as well.
Hempstead, of Robert Wood Johnson, pointed to foundation data that show Kentucky, which expanded Medicaid, had a 73 percent drop of hospital admissions of uninsured patients from 2013 to 2015. Georgia, over that same period of time, had an 8 percent increase of uninsured admissions.
Uninsured patients often are unable to pay their hospital bills.
Kentucky’s uninsured emergency room visits went from 28 percent of the hospitals’ total to 7 percent from 2013 to 2015, while Georgia’s dipped from 28 percent to 25 percent, the Robert Wood Johnson Foundation data also show.
Another Urban Institute study last month found that under expansion, Georgia would see the third-largest drop in uninsured people under Medicaid expansion among states that have not expanded, a figure of 509,000. Other estimates, including that of the Georgia Chamber, are higher.
Custer said the presidential election may be a pivotal factor in Georgia’s potential Medicaid expansion. Republican candidate Donald Trump (like the leading GOP rivals he beat for the nomination) has talked about scrapping the ACA, so it’s hard to say what would happen to Medicaid expansion if he’s elected.
Democratic candidate Hillary Clinton has reiterated her longtime support of the ACA, Custer noted, and thus Medicaid expansion would be more or less cemented in place on the federal level for four years if she wins the White House.
For more Georgia Health News, go to georgiahealthnews.com.