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Regulation and Compliance > State Regulation

New PPACA Medicaid enrollees not costing Feds as much

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New data suggests that those who have joined the Medicaid rolls as a result of the Patient Protection and Affordable Care Act are not costing the federal government as much as those who were previously enrolled.

But it also suggests that the budgetary impacts of increased Medicaid access differs dramatically between states.

According to an analysis of federal figures by the Kaiser Family Foundation, new adult Medicaid enrollees only account for 10 percent of Medicaid spending across the country, even though those enrollees make up 13 percent of the total population covered by Medicaid.

The more useful figure, however, may be the 16 percent share of spending that the new group accounted for in states that actually expanded Medicaid to individuals and families with incomes up to 138 percent of the federal poverty level.

Twelve percent of that spending is going to cover those who are newly eligible for Medicaid, while 4 percent is financing additional enrollees who were previously eligible under the old rules but whose state-financed coverage is now reimbursed at a higher rate by the federal government than before.

The average cost of each new enrollee in 2014 was $4,513, 37 percent lower than the average of $7,150 that states spent on Medicaid recipients in all groups.

But some states saw spending increase drastically with the additional Medicaid enrollment.

Leading the pack was Washington state, where new enrollees accounted for 31 percent of the state’s Medicaid spending.

In second and third places were Oregon and Kentucky, which spent 29 percent and 25 percent, respectively, of their Medicaid funds on new enrollees.

New Hampshire saw the smallest budgetary impact, with new enrollees only accounting for 3 percent of the Granite State’s Medicaid spending. At 7 percent, Illinois was the only other state where the new group made up less than a tenth of Medicaid dollars.

The vast majority of the new spending is ultimately paid for by the federal government — 94 percent, according to Kaiser. Although some of the costs will shift to the states in the coming years, PPACA commits the federal government to picking up at least 90 percent of the tab of Medicaid expansion from 2020 on.

See also:

Huge U.S. hospital markups dominated by for-profit chains

Ex-CMS chief Tavenner joins LifePoint Hospitals board

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