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Report: Medicaid Expansion Tied To Lower Costs for States

Report: Medicaid Expansion Tied To Lower Costs for States

October 16, 2014 — States that did not expand their Medicaid programs under the Affordable Care Act (PL 111-148) will increase state Medicaid spending this year by 2.4 percentage points more than expansion states, according to a new Kaiser Family Foundation analysis, CQ HealthBeat reports.

Specifically, state Medicaid spending in non-expansion states is expected to grow by 6.8%, compared with 4.4% in expansion states. Overall, total spending in expansion states will increase by 18.3%, compared with 6.5% in non-expansion states.

According to the analysis, Medicaid enrollment in non-expansion states during FY 2015 is expected to increase by only 5.2%, compared with an estimated 18% enrollment growth in expansion states.

The slower state spending increase in expansion states can partially be attributed to higher federal funding matching rates, CQ HealthBeat reports. According to CQ HealthBeat, CMS through 2016 is covering the cost for all newly eligible individuals under the ACA's Medicaid expansion before gradually decreasing the matching rate to 90% by 2020 and beyond. However, CMS pays a lower amount for individuals who qualify for Medicaid under the old eligibility rules.

Eligibility Changes

The analysis also found that four states -- Arkansas, Indiana, Louisiana and Maine -- limited Medicaid eligibility during fiscal year 2014, while none plan to do so in FY 2015.

Meanwhile, 31 states said they expanded eligibility during FY 2014, in some cases even beyond the ACA, while nine states said they plan to expand eligibility in FY 2015 (Adams, CQ HealthBeat, 10/14).

Survey: Many States Increasing Medicaid Benefits in FY 2015

In related news, 22 states are increasing benefits for Medicaid beneficiaries in fiscal year 2015, while two states are reducing benefits, according to a separate survey released Tuesday by KFF and the National Association of Medicaid Directors, Kaiser Health News' "Capsules" reports.

The survey included an analysis of 50 state Medicaid programs. The two states cutting Medicaid benefits mark the fewest states to do so in the last nine years, according to the survey.

Among the states adding benefits, the most common new benefits include dental coverage, mental health care and services related to substance use disorders (Galewitz, "Capsules," Kaiser Health News, 10/14).