States That Expanded Medicaid Reap Millions In Savings And New Revenue

The 31 states (and District of Columbia) that expanded eligibility of their Medicaid program are saving millions—and in many cases, tens of millions—of dollars without sacrificing the number of services offered, according to a new report. By not expanding Medicaid, policymakers in 19 states have foregone their own savings and denied coverage to nearly 3 million people. Prepared by researchers at Manatt with funding from the Robert Wood Johnson Foundation, the report identifies several sources of savings and new revenue, including: less state spending on programs for the uninsured; more federal dollars coming to the state for newly eligible Medicaid enrollees—including funds to cover typically expensive beneficiaries like pregnant women and high-need populations; and increased revenue from existing insurer and provider taxes. In some states, the researchers say budget savings should offset the cost of expanding Medicaid through 2021.

“States that expanded Medicaid are realizing millions of dollars in savings and new revenue, with the added benefit of thousands of previously uninsured residents gaining coverage and consequently, access to care,” said John Lumpkin, MD, senior vice president at the Robert Wood Johnson Foundation. “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.”

Researchers examined savings and increased revenue for 12 states that expanded Medicaid, including Washington, D.C.

Key highlights of savings directly related to a state’s decision to expand Medicaid include:

  • California saved $250 million in spending on its low income health program in 2015.
  • Colorado saved $96 million in spending in 2015 on childless adults newly eligible for Medicaid.
  • Kentucky saved $21 million on mental health services in 2015.
  • Maryland saved nearly $14 million on uncompensated hospital care in 2015.
  • Michigan saved $19 million on prison health services in 2015.
  • Pennsylvania saved nearly $108 million in state spending in 2015 because of expansion.

A full list of all sources of savings and new revenue for each state studied is available here.

About the Robert Wood Johnson Foundation

For more than 40 years the Robert Wood Johnson Foundation has worked to improve health and health care. We are working with others to build a national Culture of Health enabling everyone in America to live longer, healthier lives. For more information, visit www.rwjf.org. Follow the Foundation on Twitter at www.rwjf.org/twitter or on Facebook atwww.rwjf.org/facebook.

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