States Worry About Cost Of Medicaid Expansion

Lawmakers are cautious about expanding Medicaid coverage because they worry how it will be funded. The News-Leader (Springfield, Mo.) reports: "A big component of President Obama and congressional Democrats' plans to reduce the number of Americans without health insurance is a massive expansion of Medicaid coverage to low-income adults making less than $14,404 a year. But the proposed Medicaid expansion has become somewhat lost in the national debate about whether the federal government should set up a public insurance plan to compete with the private sector. The U.S. House version of the current health care reform legislation would expand Medicaid to people making up to 133 percent of the federal poverty level; the Senate bill goes further, to 150 percent."

"The Medicaid expansion has not been lost on some (of) Missouri's policymakers who say that without full federal funding, it will wreak havoc on the state budget and possibly trigger the need for a massive tax increase. Nationwide, the House bill would add 11 million more Americans to the Medicaid entitlement program, costing $438 billion over 10 years, according to the Congressional Budget Office. As currently written, the House bill would provide 100 percent federal funding through 2014 and then drop down to 90 percent in 2015, the last year specified in the legislation" (Livengood, 8/23).

The Lancaster (Ohio) Eagle Gazette/Gannett reports: "Medicaid... consumes about 25 percent of state budgets, even with the federal government paying about 60 percent of the cost. A key provision being considered by House and Senate lawmakers would dramatically expand the eligibility of Medicaid so that adults and families previously not covered would get access to health care. But such an expansion also could mean additional costs for states" (Rulon, 8/22).

Related KHN story: Is Medicaid Or Private Insurance Better For The Poor Uninsured?