Annual State Costs of Medicaid Expansion

Governor Cooper released his first state budget yesterday, and he continued his call for Medicaid expansion, with the state share to be paid by hospitals that would receive more revenue from expansion. I have a piece in the January-February issue of the North Carolina Medicaid Journal making the case for expansion.

A few folks have asked me about some of the numbers in my piece above, and in particular my estimate of $6.2 Billion in State costs for the 10 years 2017-26 (that would leverage $52.4 Billion more in new federal money over the same period). The two most common questions are whether the State costs (1) account for other savings; and (2) are they the same each year?

The first answer is no, the $6.2 Billion are the estimated state flows required under expansion. This doesn’t answer what source pays them (the Governor suggested hospitals), but is just the magnitude of the flows required. The $4.9 Billion number also highlighted is adjusted for an estimate of uncompensated care savings, so is the net cost.

ncmj-medicaid-3-02-17-blog

The answer to the second question is that the flows are not uniform across the years 2017-2026, but start lower and increase over time (with inflation and in growth in population). The table below provides the flows of new State costs with expansion, along side the state costs if we do nothing. The default federal cost of North Carolina’s Medicaid program under no change is around $135 Billion over the same 10 year period.

ncmj-medicaidcosts

Note that the estimates I used are based on the Urban Institutes work and projections. There are a variety of such models and they don’t all yield the exact same answer, but provide similar magnitudes. More precise estimates could likely be developed for North Carolina, but at this point I don’t really think such technical questions are the stumbling block to expansion in North Carolina.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

One Response to Annual State Costs of Medicaid Expansion

  1. Pingback: Thoughts on Republican Repeal & Replace | freeforall

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