Medicaid Expansion Will Save Washington State Money
One of the most compelling arguments in favor of Medicaid expansion, in addition to the hundreds of thousands more people who will obtain coverage, is the expansion will actually save the state money.
How is this possible?
The federal government will pay for 100 percent of the costs for the first three years, gradually tapering down to 90 percent in 2020 and beyond. Over the first seven years, the state’s share of costs is a mere 1.5 percent.
However, savings outweigh any costs. The cost of current programs such as Basic Health and Disability Lifeline will be shifted to the federal government at the higher contribution rates mentioned above.
Savings are estimated at $120 million from 2014-2020. And much of the savings are realized upfront—in the first two years, the state will save $200 million from full expansion.(1)
The overall savings to the state will likely be even greater as the ripple effects of covering more people are seen throughout the health care system- such as fewer emergency room visits and better prevention as a result of increased access to chemical dependency and mental health treatment.
As stated in a recent Urban Institute report, “State costs for 2014 to 2017 would actually be higher if the state opts out of any expansion.”(2)
Full expansion of Medicaid is a deal the state cannot afford to pass up.
This is the third post in a series Why Medicaid Expansion is a Good Idea. Click here to see the full info graphic.
1. Matthew Buettgens, et al., Medicaid Expansion Options for Washington (The Urban Institute, September 2012). http://www.urban.org/UploadedPDF/412672-Medicaid-Expansion-Options-for-Washington.pdf; reflects Budget & Policy Center calculations of data from this report.
2. See footnote 1