Medicaid Expansion’s Costs May Be Less, Group Says

Expanding Medicaid, the health program for low-income people, would cost states about a third less than an estimate earlier this year by the Congressional Budget Office, a Washington-based research group calculated.

Adding low-income adults earning near-poverty incomes to Medicaid, under the Patient Protection and Affordable Care Act, would cost states about $46 billion over a decade, the Center on Budget and Policy Priorities said in a report yesterday based on data from the CBO. In February, the CBO said the expansion would cost states $70 billion.

Medicaid expansion is a key plank in the law’s attempt to extend health coverage to the nation’s 48 million uninsured people. Twenty-four states, most of them with Republican governors, have rejected the expansion, saying the small share they would have to pay -- no more than 10 percent of the cost -- is unaffordable.

“Health reform’s Medicaid expansion, which many opponents wrongly claim will cripple state budgets, is an even better deal for states than previously thought,” Edwin Park, vice president for health policy at the CBPP, an independent research group, said in the report.

Park said the CBO appeared to have lowered its estimate of the expansion’s cost because the agency expects fewer people who were already eligible for Medicaid, but not enrolled, to sign up. The CBO said last week that it expects 7 million people to be added to Medicaid this year, a reduction by 1 million from estimates in February.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Bruce Rule, Angela Zimm

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