New Report Estimates Kentucky Could Save Millions by Expanding Medicaid
Jul 12th, 2012
A new report estimates Kentucky could save as much as $828 million from 2014 to 2019 by expanding Medicaid to adults with incomes up to 138 percent of the federal poverty level as permitted under the Affordable Care Act (ACA). The report, recently released by the Urban Institute and the Robert Wood Johnson Foundation, analyzed the savings each state would realize as a result of expanded health coverage under the ACA.
The savings would come through a reduction in uncompensated health care now provided to the uninsured because the Medicaid expansion will make coverage available to more than 300,000 Kentuckians with incomes up to 138 percent of the poverty level—over half of the current uninsured population in the Commonwealth.
Kentucky’s cost of expanding Medicaid during the first the six years of the ACA is estimated at only $547 million because the federal government will pick up 100 percent of expansion costs from 2014 to 2016 and gradually increases the amount the state must pay up to a maximum of 10 percent by 2020. (Kentucky pays 29 percent of costs under the current Medicaid program.)
However, the report estimates this additional state cost will be offset because the Medicaid expansion and availability of coverage through Health Exchanges under the ACA will reduce the amount of uncompensated care in Kentucky by $687 million to as much as $1.375 billion from 2014 to 2019.
The bottom line is Kentucky would experience net savings of between $140 million and $828 million through 2019 by taking advantage of the Medicaid expansion available under the ACA.
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