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Analysis Outlines How Medicaid Expansion Will Impact State Budgets

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Analysis Outlines How Medicaid Expansion Will Impact State Budgets

July 19, 2012

The Center on Budget and Policy Priorities (CBPP) has released an analysis of the impact on state budgets of implementing the Medicaid expansion provided for in the recently-upheld Affordable Care Act.

In the wake of the Supreme Court ruling, states now have the option of whether to expand their Medicaid coverage to cover individuals earning up to 133% of the federal poverty level. If states opt-in to a full expansion, the Congressional Budget Office (CBO) estimates that the expansion will add very little to what states would have spent without health reform, while providing health coverage to an additional 17 million low-income adults and children.

The expansion would also reduce state and local government costs for uncompensated care and other services provided to the uninsured, which would serve to offset—in full or in part—the modest increase in state Medicaid costs, which CBO estimates at approximately 2.8% over what they would have spent without health reform.