WV Center on Budget and Policy > Blog > Health Care > Medicaid Expansion Can Save West Virginia Millions

Medicaid Expansion Can Save West Virginia Millions

Expanding Medicaid to 130,000 West Virginians would provide $281 million in uncompensated care savings, according to a new report by the Urban Institute. Taking these savings into account, the total cost of expanding Medicaid in the state would by only $338 million or just $33.8 million per year over the next ten years (2013-2022). This amounts to only $260 for each new Medicaid enrollee per year. 

Though the state of West Virginia has not yet decided whether it wants to expand Medicaid under the Affordable Care Act, these new findings may help alleviate some of the concerns. 

The costs of implementing the Medicaid expansion are relatively small when compared to total state Medicaid spending. Over the ten-year period West Virginia’s Medicaid costs would only increase by 2.7 percent. The federal government will initially pay 100 percent of the state’s Medicaid expansion costs and will drop to 90 percent in the future. The Urban Institute estimates that $8.7 billion will come from the federal government between 2013 and 2022. 

While $338 million may seem like a lot of money, it’s only a very small share of projected state spending over the next ten years, Based on projections from the State Budget Office and a growth rate of less than 3 percent (which is conservative), it would be less than 1 percent  (0.7%) of the state’s base budget over the next ten years.

A decline in uncompensated care and relatively low costs are not the only advantages to Medicaid expansion. The Urban Institute concludes that nationally:

“The Medicaid expansion will yield additional state fiscal gains in three areas: increasing federal matching payments for consumers who would qualify for Medicaid even without the expansion; reducing states’ non-Medicaid health care spending on poor, uninsured residents who would receive Medicaid under the expansion; and increasing state revenues due to heightened economic activity or taxes on insurance premiums or health-industry-specific transactions. These factors could outweigh the net cost increases that we estimate for many states, and they would raise the total savings experienced by states collectively above the estimated $10.1 billion for 2013-2022.”

This small investment will have a large and positive impact on the state. The 130,000 newly insured will be able to take preventative steps against disease and will become much healthier over their life and live longer. When people are healthier and living longer, they are presumably more likely to work, be educated, make more money, and positively contribute to society.

West Virginia cannot afford to ignore this opportunity. It will not only save the state budget millions in uncompensated care, but also provide an opportunity for West Virginians to lead healthy lives.  This is a modest investment so workers can go to the doctor when sick, get medications when necessary, and not rely on the emergency room as a last resort. The impact of a better-insured populace is far too important to our workforce and community.

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