12:50pm

Tue November 27, 2012
Health and Welfare

Study Predicts Expanding Medicaid will Increase Costs in Kentucky

Expanding Medicaid to people making up to 138 percent of the poverty level under federal health reform and its heavy subsidies would cost Kentucky about 5 percent more for Medicaid over the next 10 years than doing nothing, the Kaiser Family Foundation said in a state-by-state analysis today.

According to the study done by the Urban Institute for the foundation's Commission on Medicaid and the Uninsured, the state would spend $25.1 billion from 2013 to 2022 if it and no other state expanded the program. If all states expanded it, Kentucky's cost would be $26.4 billion, the study estimated.

Under the Patient Protection and Affordable Care Act, the federal government would pays the full cost of the expansion from 2014 to 2016. The federal government’s share would drop to 95 percent in 2017 and to 90 percent by 2020. In the 2013-14 fiscal year, the state budget calls for $1.48 billion in state funds to be spent on Medicaid benefits. The federal government pays about 72 percent of the program's cost in Kentucky.

In human terms, the report says the law will reduce the number of people in Kentucky without health insurance in 2022, no matter what happens. It says that if the act had never passed, 740,000 Kentuckians would have been uninsured in 2022. It will reduce that number to 513,000 even if Medicaid is not expanded anywhere. If all states expand Medicaid, the number of uninsured Kentuckians would drop to 332,000, the study estimates.

The Kaiser report is an update of a study done before the U.S. Supreme Court ruling ruled that the law was constitutional but made Medicaid expansion optional for states. So far, eight states have indicated their unwillingness to participate in the expansion, though more are expected to opt out but are waiting until legislatures return in January to discuss the matter.

See the entire report here.