Notes on the Kaiser Commission on Medicaid and the Uninsured Analysis: Medicaid Coverage

Notes on the Kaiser Commission on Medicaid and the Uninsured Analysis: Medicaid Coverage and Spending in Health Reform: National and State-By-State Results for Adults at or Below 133% FPL

Below please find some quick talking points developed by CCF on today’s release on the Medicaid coverage levels and spending under health reform by the Kaiser Commission on Medicaid and the Uninsured, performed by the Urban Institute. These talking points can be used together with those we shared immediately after the passage of the health reform law: Talking Points on the Impact of Health Reform on State Budgets/Medicaid (March 25, 2010).

It’s important to note the limitations of the Kaiser/Urban analysis. It is limited to the coverage impact and cost to states and the federal government of the Medicaid expansion for adults. Most notably, it does not address potential savings to states from the reductions in uncompensated care expenses that will occur as more people gain coverage. These savings will stem not only from increased Medicaid coverage, but also from new subsidized (and 100% federally funded) coverage under Exchange plans and more affordable private health insurance. . At today’s briefing, the report’s author, John Holahan, suggested that these savings would more than offset the estimated $21 billion in spending by states. Specifically, he would roughly estimate that states will save up to $80 billion in uncompensated care costs through 2019.

The analysis also does not take into account other potential effects of health reform on state budgets, such as changes in state spending for children’s coverage, any movement of adults over 133% of FPL out of Medicaid and into Exchanges, the reduction in federal disproportionate share hospital funding, or any state Medicaid expansions before 2014.

Also note that the Kaiser/Urban analysis contains two sets of estimates, one based on assuming that those made newly eligible for Medicaid will participate at a rate comparable to those who now qualify for the program (labeled the standard participation scenario) and a second that assumes more robust participation due to enhanced outreach efforts and the individual mandate. The numbers cited in the talking points below refer to the standard scenario. When comparing the Kaiser/Urban estimates to others that may have been produced in your state, the assumptions for participation rates may be an important source of variation.

Finally, please contact your Finish Line or Narrative team members if the Kaiser/Urban estimates receive media attention in your state. We can help you respond with talking points that are more responsive to the particular issues important in your state.

Talking Points in Response to KCMU Medicaid Report
May 25, 2010

“The study shows states are getting a really good bang for their buck. 11.2 million people will be newly covered with 95% of the cost being picked up by the feds. “ (see Table 1 on page 10 in report for state specific numbers)

“What the study doesn’t show is how much more on top of that states are likely to save as the number of uninsured people goes down. The author of the study suggested in today’s briefing that states would save as much as $80 billion in uncompensated care costs, more than covering the new costs associated with the expanded Medicaid coverage." (Briefing materials including video)