We previously reported (here and here) that the state will likely incur little cost associated with the expansion of Medicaid beginning in 2014 to around 300,000 Kentuckians. But in fact the expansion could actually save the state between $140 million and $828 million over the first six years of the law, according to a report by the Urban Institute and the Robert Wood Johnson Foundation.
The report estimates that the expansion of Medicaid to adults with incomes up to 138 percent of the federal poverty level will cost Kentucky $547 million over the years 2014-2019.
However, expanded Medicaid coverage and the increase in coverage through a new health insurance exchange will result in a big drop in the number of uninsured. That will mean a huge reduction in monies the state spends on uncompensated care for the uninsured, such as emergency room treatment in hospitals. The report puts those savings at between $687 million and $1.375 billion over the years 2014-2019. And those numbers don’t include savings in mental health spending for the uninsured now paid by the state, which will also decrease.
The net result is between $140 million and $828 million in state savings over that six year period. For that, Kentucky would get between $12 and $13 billion in additional federal money. Most importantly, it will mean a big step forward in addressing the moral, economic and health crisis of the uninsured.
Those who propose that Kentucky should reject the expansion, which the Supreme Court ruling on health reform makes possible without a loss of existing Medicaid funds, should explain why Kentucky should turn down such a good deal.