Medicaid expansion forces $11 billion increase in spending

The expansion of Medicaid required under the Patient Protection and Affordable Care Act will drive state Medicaid expenditures beyond sustainable limits, a joint study released today by the Oklahoma Council of Public Affairs (OCPA) and the Cato Institute projects.

The report, Projecting Oklahoma’s Medicaid Expenditure Growth Under the Patient Protection and Affordable Care Act, estimates the required expansion will increase Oklahoma’s Medicaid enrollment to 36 percent of the population by 2023 and will add an additional $11.4 billion to state program expenditures between 2014 and 2023.

“The findings of this report are staggering,” said Jason Sutton, J.D., health policy analyst for OCPA. “During the last decade, Oklahoma’s Medicaid program has grown at a much faster rate than nearly every other state’s program. Just maintaining the status quo is already unsustainable. The Patient Protection and Affordable Care Act will only make things much worse. Absent Congressional repeal or the Supreme Court overturning the law, Oklahoma is heading for a major fiscal crisis.”

Under the Act, every state is required to expand eligibility for Medicaid to every citizen with an income up to 138 percent (133 percent plus a five percent income disregard) of the federal poverty level. Using methodology developed by the Cato Institute senior economist Jagadeesh Gokhale, Ph.D., a member of the Social Security Advisory Board, the report estimates state Medicaid expenditures for Oklahoma during the first 10 years (2014-2023) after the healthcare law takes effect.

Even without accounting for the expansion required by the Act, the study projects state spending on Medicaid will increase to approximately $32.3 billion between 2014 and 2023, bringing cumulative state spending on Medicaid under the Act to $43.7 billion during the law’s first decade.  
OCPA is a nonprofit, nonpartisan think tank which formulates public policy research and analysis consistent with the principles of free enterprise, limited government, and individual initiative.  Click here for more.

The Cato Institute is a Washington, D.C.-based a public policy research organization — a think tank — dedicated to the principles of individual liberty, limited government, free markets and peace.  Click here for more.