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September 2012 St@teside

NEW Medicaid Expansion Tools and State Updates

Framing and Planning a Financial Impact Analysis
The State Network has just released a worksheet and considerations table that can serve as a guide for states considering their own Medicaid expansion analysis. The Supreme Court’s decision in NFIB v. Sebelius did not change the underlying Medicaid expansion provisions of the Affordable Care Act (ACA), but did remove the ACA’s enforcement authority for states choosing not to expand. As a result, states are facing an unexpected and difficult implementation decision regarding this expansion. For many states, the availability of 100 percent federal match for this population from 2014 through 2016, along with a still very substantial federal match that decreases to 90 percent by 2019, is a strong incentive to expand Medicaid. Regardless of this incentive, most states are taking a measured and analytical approach to determining the fiscal impact of this choice before making a final decision.
Created by State Network experts at the State Health Access Data Assistance Center (SHADAC), the Center for Health Care Strategies (CHCS), and Manatt Health Solutions, this analysis approach is limited to financial considerations related to the state’s decision to expand and therefore excludes many important financial aspects related to the ACA as a whole (e.g., remaining mandatory provisions). State specific Medicaid expansion analysis should take into account existing program structure, available data sources (both state and national) and realistic assumptions about enrollment and costs. States also should note within the analysis whether costs are directly related to the Medicaid expansion or if they are likely to occur despite expansion (e.g., the woodwork effect of individuals currently eligible but not enrolled deciding to seek coverage).
Recent Medicaid Expansion Updates and Additional Resources 
Earlier this month, Arkansas Governor Mike Beebe announced his support for pursuing the Medicaid expansion outlined in the Affordable Care Act (ACA). His decision was prompted by a letter from the Centers for Medicare and Medicaid Services (CMS) which outlined the flexibility that states have with regards to implementing the expansion. Cindy Mann, Director of the Center for Medicaid and CHIP Services, stated in the letter that a “state may choose whether and when to expand, and, if a state covers the expansion group, it may decide later to drop the coverage.” Governor Beebe understands the financial implications of expanding Medicaid to an estimated 250,000 adults and children.  A recent analysis by the state’s Medicaid program found that the state will save approximately $372 million during 2014-2021 as a result of the expansion. While Beebe has demonstrated his support, he will need to get approval from the state legislature during the 2013 legislative session.
Chuck Milligan, Maryland Medicaid Director, recently authored a blog posting for Health Affairs – Expanding Medicaid: A Smart Decision for Maryland.  Explaining the state’s rationale for pursuing the Medicaid expansion, Milligan concludes by saying “Maryland crunched the numbers and found that, whether judged on economic grounds, personal costs, or in human terms, the conclusion is clear — implementation of the Medicaid expansion is the best choice for Maryland, our citizens, our economy, and our future.” 
A recent report, "Considerations in Assessing State-Specific Fiscal Effects of the ACA’s Medicaid Expansion," by Stan Dorn at the Urban Institute, explores the myriad fiscal issues that must be considered by states as they determine whether or not to pursue the Medicaid expansion. The analysis looks at potential effects in four areas: state costs, state savings, state administration, and state revenue.