Cost and Coverage Implications of the ACA Medicaid Expansion: - PDF document

Cost and Coverage Implications of the ACA Medicaid Expansion: National and State ‐ by ‐ State Analysis Report Authors: John Holahan, Matthew Buettgens, Caitlin Carroll, and Stan Dorn Urban Institute November 26, 2012 FIGURE 1 Objectives of the Study • Estimate the effect, by state, of the ACA Medicaid expansion with all states implementing the expansion compared to no ACA on federal and state spending and coverage of current and new eligibles • Estimate the implications if the ACA is implemented but no states adopt the Medicaid expansion and then estimate incremental effects, by state, of the decision to expand Medicaid on: – federal and state Medicaid spending – state spending for uncompensated care and provider reimbursement – state fiscal effects relative to current general fund expenditures • Estimate the effect, by state, of state decisions to adopt the Medicaid expansion combined with other provisions of the ACA on Medicaid enrollment and the number of uninsured 1

FIGURE 2 Methods • Develop a pre ‐ ACA baseline for each state, based on CBO projections and state expenditure data • Estimate the ACA’s state ‐ by ‐ state impact with no state expanding Medicaid and with all states expanding Medicaid, using the Urban Institute Health Insurance Policy Simulation Model (HIPSM) ; the model incorporates pre ‐ ACA eligibility rules for each state – Participation rates result from model estimates of individual behavior and are consistent with published research – Cost of coverage depends on individual characteristics such as health status, previous characteristics and state; overall estimates of federal expenditures are close to CBO’s • Federal matching rates depend on ACA provisions: standard FMAP for new enrollment among current eligibles, higher ACA rates for new eligibles and higher match rate for CHIP eligibles • We estimate savings to states with limited benefit programs whose recipients become new eligibles and states with prior expansion programs that receive enhanced matching rates FIGURE 3 State Estimates will Vary Due to Limitations in this Study • While HIPSM uses two years of Current Population Survey data, sample sizes can be somewhat small in some states • Several sources of savings to states cannot be estimated with 50 ‐ state data: – Savings from no longer covering certain adults with incomes above 138% of the federal poverty line (FPL), who could be moved from Medicaid into exchange – Savings on certain adults with incomes at or below 138% of the FPL, such as the medically needy, who could now be covered as new eligibles, with higher federal matching payments – Savings on non ‐ Medicaid health care (e.g., state mental health) for the uninsured who newly qualify for Medicaid – Additional state revenue that results from, e.g., the effect of new federal expenditures on the state economy 2

FIGURE 4 Total State and Federal Medicaid Spending Under ACA with All States Expanding Medicaid, 2013 ‐ 2022 $ in billions: Baseline State Spending, No ACA $2,680 New State Spending under Total New ACA Medicaid $76 Spending under New Federal ACA: $1,029 Spending under Baseline Federal Billion ACA Spending, No ACA $952 $3,659 Total Medicaid Spending Over the Decade: $7,368 Billion Note: Individual components may not sum to totals due to rounding. Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. FIGURE 5 New State and Federal Medicaid Expenditures under ACA, with All States and No States Expanding Medicaid, 2013 ‐ 2022 $ in billions: State Federal $952 $800 $152 $76 $68 $8 ACA with All States ACA with No States Incremental Impact of Expanding Medicaid Expanding Medicaid Medicaid Expansion Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. 3

FIGURE 6 New Federal and State Spending on Current and New Eligibles Under the ACA with All States Expanding Medicaid , 2013 ‐ 2022 Federal State Current New Total $221.5 $730.9 $952.5 $50.0 $76.5 $26.5 Total = $248.0 billion Total = $780.9 billion Total = $1,028.9 billion Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. FIGURE 7 Impact of the Incremental Adoption of the Medicaid Expansion on Federal and State Expenditures, 2013 ‐ 2022 Federal State Total East West New Middle South South South U.S. England Atlantic Atlantic Central Central 34.5% 26.2% 26.2% 23.3% 21.0% 19.8% 17.5% 14.6% 12.3% 11.1% 5.7% 3.8% 4.5% 4.6% 3.5% 0.3% ‐ 4.2% ‐ 4.6% SOURCE: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. NOTE: Selected Regions Displayed: The New England region includes CT, ME, MA, NH, RI, and VT. The Middle Atlantic region includes DE, DC, MD, NJ, NY, and PA. The South Atlantic region includes FL, GA, NC, SC, VA, and WV. The East South Central region includes AL, KY, MS, and TN. The West South Central region includes AR, LA, OK and TX. 4

FIGURE 8 Change in State Medicaid Expenditures Under the ACA With All States Expanding Compared to No States Expanding Medicaid, 2013 ‐ 2022 VT WA ME MT ND NH MN OR MA WI NY ID SD MI RI CT WY PA NJ IA NE OH DE IN IL NV MD UT WV VA CO DC KS MO KY CA NC TN SC OK AR AZ NM GA MS AL LA TX FL AK HI ‐ 11% to 0% (10 states) >0% to 2% (12 states, including DC) US Total: 0.3% >2% to 4% (17 states) >4% to 7% (12 states) Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. FIGURE 9 Net State Fiscal Impact of Medicaid Expansion, Including State Savings in Uncompensated Care Costs, 2013 ‐ 2022 $ in millions: $8,238 ‐ $10,072 ‐ $18,310 Incremental Change in Change in State Spending on Net Change in State Spending Medicaid Spending Due to Uncompensated Care Due to Due to Expansion Expansion Expansion Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. 5

FIGURE 10 Impact of the Incremental Adoption of the Medicaid Expansion on State Expenditures, 2013 ‐ 2022 Change in State Medicaid Expenditures Change in State Expenditures on Medicaid and Uncompensated Care Combined East West New Middle South South South U.S. Atlantic Atlantic England Central Central 4.6% 4.5% 3.5% 3.1% 2.9% 2.5% 0.3% ‐ 0.4% ‐ 4.2% ‐ 4.6% ‐ 4.4% ‐ 4.8% SOURCE: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. NOTE: Selected Regions Displayed: The New England region includes CT, ME, MA, NH, RI, and VT. The Middle Atlantic region includes DE, DC, MD, NJ, NY, and PA. The South Atlantic region includes FL, GA, NC, SC, VA, and WV. The East South Central region includes AL, KY, MS, and TN. The West South Central region includes AR, LA, OK and TX. FIGURE 11 Incremental Impact of the Medicaid Expansion on State Medicaid Expenditures Relative to General Fund Expenditures, 2013 ‐ 2022 State Medicaid Expenditure Net State Expenditure East West New Middle South South South U.S. Central Central England Atlantic Atlantic 1.2% 1.2% 1.1% 0.8% 0.8% 0.8% 0.1% ‐ 0.1% ‐ 1.1% ‐ 1.2% ‐ 1.8% ‐ 1.9% SOURCE: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. NOTE: Selected Regions Displayed: The New England region includes CT, ME, MA, NH, RI, and VT. The Middle Atlantic region includes DE, DC, MD, NJ, NY, and PA. The South Atlantic region includes FL, GA, NC, SC, VA, and WV. The East South Central region includes AL, KY, MS, and TN. The West South Central region includes AR, LA, OK and TX. 6

FIGURE 12 Medicaid Enrollment Under ACA With and Without Medicaid Expansion, 2022 No ACA Baseline Medicaid Enrollment New Medicaid Enrollment 21.3 5.7 52.4 52.4 52.4 No ACA Baseline ACA with No States ACA with All States Expanding Medicaid Expanding Medicaid Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. FIGURE 13 Number of Uninsured With and Without ACA and Medicaid Expansion, 2022 Number of Uninsured Reduction in Uninsured 28% 15.1 reduction in 48% # uninsured 25.3 reduction in # uninsured 53.3 38.2 28.0 No ACA Baseline ACA with No States ACA with All States Expanding Medicaid Expanding Medicaid Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012. 7