Scare Talk on Medicaid Costs Doesn’t Square with Reality

Here are the basic facts:

  • The federal government will pick up nearly 93 percent of the cost of the Medicaid expansion over its first nine years (2014-2022), according to the Congressional Budget Office (CBO).
  • States will spend just 2.8 percent more on Medicaid with the expansion than they would have without health reform, CBO finds (see chart).
  • This 2.8 percent figure overstates the net impact on state budgets because it doesn’t reflect the large savings that states and localities will realize in health care spending for the uninsured.  The Urban Institute estimates that states will save between $26 and $52 billion in this area from 2014 through 2019.  The Lewin Group estimates the state and local savings at $101 billion.