Health reform law could save states money

NEWS IN BRIEF — Posted Jan. 3, 2011

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States will spend between $21 billion and $43 billion more on Medicaid coverage for low-income adults from 2014 to 2019 under the national health reform law's Medicaid expansion. However, states' net spending on health care during this period could decrease due to less uncompensated care and the availability of subsidized coverage for certain Medicaid enrollees, according to a new study.

"Net Effects of the Affordable Care Act on State Budgets" was released Dec. 1 by the Urban Institute and commissioned by First Focus, a Washington, D.C.-based organization that advocates for children and families.

The health reform law is expected to increase federal spending, sometimes to the benefit of states. States could save at least $21 billion between 2014 and 2019 if they shifted most Medicaid enrollees earning more than 133% of poverty to subsidized coverage that will be available in health insurance exchanges, the report concluded. States also could save at least $43 billion through decreased spending on indigent care under the coverage expansions. Also, the Medicaid expansion will increase the federal share of spending on mental health and substance abuse treatment, savings states at least an additional $20 billion.

The report is available online (link).

Note: This item originally appeared at

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