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Medicaid: Still the Forgotten Issue in Health Reform

Medicaid: Still the Forgotten Issue in Health Reform. Robert B. Helms Resident Scholar American Enterprise Institute. AEI on the Hill January 25, 2012. Unchecked entitlement growth. Total Estimated Cost in 2084. 46.0% of GDP. Net Interest. 9.7%. % GDP. Medicaid & Exchanges . 10.4%.

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Medicaid: Still the Forgotten Issue in Health Reform

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  1. Medicaid: Still the Forgotten Issue in Health Reform Robert B. Helms Resident Scholar American Enterprise Institute AEI on the Hill January 25, 2012

  2. Unchecked entitlement growth Total Estimated Cost in 2084 46.0% of GDP Net Interest 9.7% % GDP Medicaid & Exchanges 10.4% 26.4% of GDP Medicare 6.3% Social Security Source: CBO Long Term Budget Outlook, 2010

  3. Medicaid – the second largest entitlement program • Medicaid Expenditures $383.5 B in FY 2010 • Federal $260.0 Billion • States $123.5 Billion • Projected to reach $840.4 B by 2019 • 91% of new Medicaid expenditures to be paid by Federal government • Medicaid covered about 62 million in FY 2009 • ACA projected to increase enrollment by 34% to 84.3 million by 2019 (CMS estimates are low compared to others) • CBO projects Federal outlays of $4.08 T 2012-21 Sources: CMS Form 64; Office of the Actuary; CBO

  4. Medicaid State Matching Rates, FY 2012 14 States with 50% FMAPs – and their FMAP without the 50% minimum*: Connecticut 14.2% Massachusetts 26.5% New Jersey 26.7% Maryland 33.5% New York 34.5% Wyoming 40.6% Alaska 45.1% Virginia 45.2% New Hampshire 46.8% Washington 48.2% California 48.6% Colorado 48.8% Minnesota 49.0% Illinois 49.7% 10 States with highest FMAPs Mississippi 74.2% West Virginia 72.6% Kentucky 71.2% Utah 71.0% Arkansas 70.7% South Carolina 70.2% Idaho 70.2% District of Columbia 70.0% (set by law, not by formula) New Mexico 69.4% Alabama 68.6% Arizona 67.3% Source: Federal Register, 75-217, 69083 *Vic Miller calculations, FY 2013

  5. Nine States Get Half the FederalMedicaid Money, Billions, 2010 *States with ~50% matching rate Total Federal Medicaid expenditures were $260 Billion in FY 2010

  6. Federal Medicaid Funds are Flowing to the Richer States Federal Medicaid Spending per Poor Person*, 2010 *States are ordered by per capita income. “Poor persons” are individuals below 125% of the Federal Poverty Line.

  7. ACA Matching Rates for the Newly Eligible • In 2014, states required to provide coverage for individuals with incomes up to 133% FPL • Adds an estimated 16 to 21 million new enrollees • 2014 – 2016 FMAP = 100% • 2017 = 95% • 2018 = 94% • 2019 = 93% • 2020+ = 90% What will this cost?

  8. Estimates of New Medicaid Expenditures, 2014-2019

  9. Additional Spending in the Five Richest and Poorest States, 2014-2019 Additional Federal Spending ($millions) Additional State Spending ($millions)

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