Medicaid Expansion: Early Signs Show Good News

Last spring, I argued that, “the economic and social arguments for Medicaid expansion are overwhelmingly positive.” A recent report from the Kaiser Health Foundation confirms this argument, and adds additional insight to the advantages of expanding Medicaid.

The Kaiser report analyzed all 50 states’ Medicaid programs. In doing so, it compared those states that expanded (“expansion states”) from those states that did not expand (“non-expansion states”). The differences are illuminating. In expansion states, Medicaid Enrollment increased by 18.0%, on average, compared to 5.1% in non-expansion states. This finding is unsurprising; states that expanded Medicaid should have had higher enrollments. The more surprising finding, however, was that expansion states’ Medicaid spending growth was 3.4% compared to non-expansion states’ spending growth of 6.9%. In other words, non-expansion states had higher growth in state spending than expansion states. These findings are breathtaking: non-expansion states have spent more state money to cover less people.

Furthermore, expansion states have seen an economic boom from federal dollars. A Deloitte study found that in Kentucky, Medicaid expansion would create 40,000 jobs and $30 billion to the state economy. In addition, the study found that expansion would save the state budget $100 million. States that did not expand suffer from the “woodwork effect,” in which previously eligible citizens come out of the woodwork to get Medicaid. The state has to pay for this without federal funding so state budgets bear the burden.

Given this positive news, the politics of Medicaid seem to be changing. Kentucky’s newly elected governor, Matt Bevin, ran on a platform to repeal the Medicaid expansion. Since his election, he has pivoted away from this position. Many states—including Missouri, Virginia, Montana, Utah, and Wyoming—are considering expansion as well. And, in a twist from conventional wisdom, a recent Kaiser Foundation poll found that the majority of Republicans (56%) in non-expansion states support Medicaid Expansion. Medicaid Expansion is not a Republican vs. Democrat issue. It is a common sense vs. intransigence dispute. As the Kaiser and Deloitte study indicate, the longer states wait to expand, the more their economy and health will suffer.

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Matthew Ryan is from Kansas City. He studied public health and economics at Saint Louis University. Prior to law school, he worked in Hartford, CT as a Jesuit Volunteer at a legal aid clinic. He is interested in health policy.

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