Study Finds Federal Funding Shields State Budgets from Medicaid Expansion Costs

April 2017 ~

According to the study published in the April issue of Health Affairs, federal funding insulated state budgets from increased spending related to Medicaid expansion.

For the study, researchers used data from the National Association of State Budget Officers (fiscal years 2010 to 2015) and a difference-in-differences framework to assess the effects of the Medicaid expansion’s first two fiscal years.

It was found that Medicaid expansion led to an 11.7% increase in overall spending on Medicaid, which was accompanied by a 12.2% increase in spending from federal funds. No significant increases were observed regarding spending from state funds from the expansion, nor any significant reductions in spending on education or other programs.

The authors commented, “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.”


Source(s): Health Affairs; Harvard School of Public Health;