On June 18, the Center on Budget and Policy Priorities (CBPP) released a report challenging the assertion that states will bear a large financial burden for the Medicaid expansion that begins in 2014 under the national health care reform law.  CBPP finds that states will only spend 1.25 percent more on Medicaid from 2014 to 2019 than they would have without the national health care reform law.  Additionally, CBPP argues that the expanded coverage will lower other state costs by reducing demand for other programs.

From the report: Health reform’s critics argue that states will bear a significant share of the costs of the new law’s Medicaid expansion, placing an unaffordable financial burden on states. The argument does not withstand scrutiny. In its first five years, the Medicaid expansion will add just 1.25 percent to what states were projected to spend on Medicaid over that period in the absence of health reform, while providing health coverage to 16 million more low-income adults and children.

Full report:  Federal Government Will Pick Up Nearly All Costs of Health Reform’s Medicaid Expansion (PDF | 273.38 KB)

CBPP.  (2010).  Federal government will pick up nearly all costs of health reform’s Medicaid expansion.  Broaddus, M. and Angeles, J.