MIT & HARVARD JOINT STUDY: AS DESIGNED, MEDICAID EXPANSION DID NOT HARM STATE BUDGETS

The first national study evaluating the impact of Medicaid expansion under the Affordable Care Act (ACA) on state spending found that the expansion was fully funded by federal dollars,

and states that expanded experienced no significant cutbacks in spending on education, transportation, and corrections, according to a paper co-authored by Benjamin Sommers, associate professor of health policy and economics at Harvard T.H. Chan School of Public Health.

The study was online published April 12, 2017 in Health Affairs and will appear in the May 2017 print edition.

“The ACA Medicaid expansion was really designed to minimize costs for states, and that’s what we found. Expansion has large benefits to low-income populations, and we don’t see state budgets taking a hit in the process,” Sommers said.

He and co-author Jonathan Gruber of MIT, who helped advise legislators during the drafting of the ACA, concluded that when states expanded eligibility for the low-income health insurance program in 2014-2015, they did see larger Medicaid expenditures but federal funds covered the costs.

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