It’s been almost ten years since the implementation of the Medicaid expansion in January 2014, and the results are in: it’s been largely positive. According to reports published by a study in 2020 and 2021, over 600 studies have shown that expansion is linked to gains in coverage, improvement in access and health, and economic benefits for states and providers.
Recent studies have focused on more specific outcomes, such as improved access to care, treatment, and outcomes for cancer, chronic conditions, sexual and reproductive health, and behavioral health. These studies have also highlighted evidence of reduced racial disparities in coverage and access, reduced mortality rates, and improvements in economic impacts for providers, especially rural hospitals, as well as economic stability for individuals.
While federal legislation to address the coverage gap nationally has failed, there is hope for states that are considering implementing Medicaid expansion. Under the American Rescue Plan Act (ARPA), states that adopt expansion will receive a temporary fiscal incentive. This incentive includes an additional 5 percentage point increase in the state’s traditional match rate (FMAP) for two years.
It’s important to note that this incentive does not apply to the expansion of the population. States are required to cover 10% of the cost of Medicaid expansion, with the federal government covering 90%. The traditional FMAP applies to most spending for all non-expansion groups, such as children, parents, and people eligible based on age 65 plus or disability. Medicaid spending for non-expansion groups is much larger than spending for the expansion group.
An analysis shows that all non-expansion states could see a net fiscal benefit over a two-year period if they adopted this expansion. In fact, the estimated fiscal benefit for South Dakota and North Carolina, the two states that recently adopted expansion, is $60 million and $1.2 billion, respectively.
While most states that have adopted expansion did so through a ballot measure, this is not an option in most non-expansion states. However, there is hope for change. North Carolina recently became the first state to adopt expansion through a legislative process since Virginia did so in 2019.
Expanding Medicaid could also help stem the increases in the number of uninsured individuals as the Medicaid continuous enrollment provision ends and states resume disenrollments after a three-year pause during the pandemic. All states have experienced significant Medicaid enrollment growth due to legislation enacted early in the pandemic that prohibited states from disenrolling people from Medicaid in exchange for enhanced federal matching funds.
Since the continuous enrollment provision expired on March 31, 2023, and states have resumed regular Medicaid disenrollments, millions lost Medicaid. If they are no longer eligible, they will face barriers completing their renewals. In non-expansion states, poor parents who are no longer eligible for Medicaid are likely to fall into the coverage gap and become uninsured.