On June 21, the Robert Wood Johnson Foundation (RWJF) and the Urban Institute released a report projecting the impact of the national health care reform law on states.  The report concludes that, on average, the law will lower state health care costs, citing increased federal Medicaid funding, changes to the Children’s Health Insurance Program (CHIP), and the creation of health insurance exchanges.  However, the authors acknowledge that there will be regional variance in the impact of the law.  The report estimates that Southern and Western states will benefit the most from the law, while the Northeastern and Midwestern states are will bear greater revenue contributions to fund the law’s provisions.

From the report:

The main components of PPACA that will affect state governments will not be implemented until 2014, when Medicaid coverage will substantially expand in most states. Federal funds will pay most of the resulting new costs, but there will be modest increases in state Medicaid spending on adults with incomes up to 133 percent of the federal poverty level (FPL). These state cost increases range from $21.1 billion to $43.2 billion over the 2014-2019 period,1 with the difference depending on the extent of beneficiary participation. These represent increases in state spending of 1.4 to 2.9 percent relative to what states would spend on such adults in the absence of reform. States should be able to manage, since the economy almost certainly will be substantially stronger by 2014 and PPACA will generate new federal payments in other areas that will significantly exceed the rise in state Medicaid spending on low-income adults.

Full report: What is the Impact of PPACA on the States? (PDF | 80KB)

Robert Wood Johnson Foundation. (2010). What is the Impact of the Patient Protection and Affordable Care Act (PPACA) on the States? Holahan, J. and Dorn, S.