ACA means money for states

Twenty states have sued to block implementation of the national health care reform law and Wisconsin will soon make it twenty-one. Some states have even citedburdensome implementation of the Affordable Care Act as a reason to not provide Medicaid. However, John Bouman of the Shriver Center points out that three different studies (one was commissioned by the White House) show state governments will actually save money due to health care reform. The latest study, from the Urban Institute, asserts that states will save between $40 billion and $132 billion from 2014-2019.

Savings will mostly come from the shifting burden of Medicaid costs. The U.S. Dept. of Health & Human Services now pays roughly 50-60 percent of the costs for Medicaid patients. In 2014, HHS will pay 100 percent of health care costs for anyone with income less than 133 percent above the federal poverty level. The payment share drops to 90 percent in 2019. There may be ideological objections to health care reform, but, fiscally speaking, ACA is the best thing that’s come along for state governments since the stimulus bill. Indeed, the real problem for states is not paying for Medicaid in the future, but how to provide Medicaid services between 2011 and 2013, when there will be neither federal stimulus nor federal ACA money.

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