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Medicaid Expansion Report Calculates Modest State Costs

John Commins, for HealthLeaders Media, November 27, 2012

However, Richard "Buz" Cooper, MD, director of the Center for the Future of the Healthcare Workforce at New York Institute of Technology and a Senior Fellow in the Leonard Davis Institute of Health Economics at the University of Pennsylvania, says the assumptions in the report are "reasonable."

"Costs at the federal level will be larger than I believe are generally being considered: $800 billion plus the costs of insuring those individuals who leave Medicaid (in states with eligibility levels above 138% of poverty) in the exchanges," Cooper said in an email exchange with HealthLeaders Media.

"I don't believe that those costs are in the report, and I expect they would be hard to calculate, since I don't think that we know the premium for policies in the exchanges or the amount of federal subsidy that will be provided. This is not my area of expert knowledge, but the REAL number is Medicaid + subsidies for old Medicaid patients in exchanges + subsidies for others in exchanges. What we know now is that it's going to be a lot more than $800 billion."

Weil also acknowledged that governors and state legislators are justifiably concerned that a fickle Congress could go back on its promises to fund the expansion, which would leave states holding the bag.

"These estimates are built around a financing model that is in current statute, and that is the appropriate model to use. But states are very nervous about the possibility of those formulas changing," he says. "Although it is possible that states can change their mind and adopt the Medicaid expansion at one point, and then if the federal funding becomes more limited they can reverse that position, that is a painful course of action and states really do want to be able to plan ahead. So the sooner we can come to closure on whether or not the financial arrangement in the Accountable Care Act is going to be stable, the easier it will be for states to make decisions in the long run."

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