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Report: States Expanding Medicaid See Revenue and Savings

Tuesday, April 21, 2015  
Posted by: MPCA
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A recent report released by the Robert Wood Johnson Foundation revealed states that expanded Medicaid under the Affordable Care Act are seeing significant budget savings and revenue gains – including Michigan. The expansion opportunity has sparked debate; however, early results from eight states show a projected $1.8 billion in budget savings and revenue gains by the end of 2015 across all eight states. In addition to Michigan, data collected from Arkansas, Colorado, Kentucky, New Mexico, Oregon, Washington, and West Virginia indicate three key findings: 

  • Reduced need for state spending on programs for uninsured and individuals with behavioral health needs

  • Savings related to increased federal dollars for certain newly-eligible enrollees (including pregnant women and individuals with disabilities)

  • Revenue gains related to existing insurer or provider taxes

  • The report in its entirety can be accessed here – State Health Reform Assistance Network, Issue Brief, April 2015. 

Savings highlights for the state of Michigan include:

  • State savings from replacing general funds with Medicaid funds - $389 million

  • State revenue gains due to expansion - $26 million

Examples of savings cited by the State of Michigan included transitioning enrollees into a state-funded program that provides targeted services for the seriously mentally ill into the new adult group as well as a reduction in correctional spending as the federal government picks up hospital inpatient costs of Medicare-eligible new adults.

Revenue gains for the state of Michigan include $26 million (SFY 2015) from Health Insurance Claims Assessment.


Source: Robert Wood Johnson Foundation

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