title: Federal Funding Insulated State Budgets From Increased Spending Related To Medicaid Expansion.
abstract: As states weigh whether to expand Medicaid under the Affordable Care Act (ACA) and Medicaid reform remains a priority for some federal lawmakers, fiscal considerations loom large. As part of the ACA's expansion of eligibility for Medicaid, the federal government paid for 100 percent of the costs for newly eligible Medicaid enrollees for the period 2014-16. In 2017 states will pay some of the costs for new enrollees, with each participating state's share rising to 10 percent by 2020. States continue to pay their traditional Medicaid share (roughly 25-50 percent, depending on the state) for previously eligible enrollees. We used data for fiscal years 2010-15 from the National Association of State Budget Officers and a difference-in-differences framework to assess the effects of the expansion's first two fiscal years. We found that the expansion led to an 11.7 percent increase in overall spending on Medicaid, which was accompanied by a 12.2 percent increase in spending from federal funds. There were no significant increases in spending from state funds as a result of the expansion, nor any significant reductions in spending on education or other programs. States' advance budget projections were also reasonably accurate in the aggregate, with no significant differences between the projected levels of federal, state, and Medicaid spending and the actual expenses as measured at the end of the fiscal year.
authors.affiliation: Benjamin D. Sommers (bsommers@hsph.harvard.edu) is an associate professor of health policy and economics in the Department of Health Policy and Management at the Harvard T. H. Chan School of Public Health, and an assistant professor of medicine at Harvard Medical School and Brigham and Women's Hospital, all in Boston, Massachusetts.
authors.forename: Benjamin D
authors.initials: BD
authors.lastname: Sommers
authors.affiliation: Jonathan Gruber is the Ford Professor of Economics at the Massachusetts Institute of Technology, in Cambridge.
authors.forename: Jonathan
authors.initials: J
authors.lastname: Gruber
mesh_terms: D004608:Eligibility Determination; D035082:Federal Government; D005380:Financing, Government / Q000191:economics* / Q000639:trends; D005544:Forecasting; D018166:Health Care Reform / Q000191:economics* / Q000331:legislation & jurisprudence / Q000639:trends; D005102:Health Expenditures / Q000639:trends; D006801:Humans; D008484:Medicaid / Q000191:economics* / Q000331:legislation & jurisprudence / Q000639:trends; D058991:Patient Protection and Affordable Care Act; D013219:State Government; D014481:United States
keywords: Health Reform; Health Spending; Medicaid; State/Local Issues