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Health Overhaul May Increase States’ Costs by $118 Billion

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March 1 (Bloomberg) -- The U.S. health-care law will cost states almost double the amount that congressional auditors estimate, Republican lawmakers said.

Representative Fred Upton, a Michigan Republican who is chairman of the House Energy and Commerce Committee, said in prepared statements before a hearing today that states estimate the overhaul signed by President Barack Obama last year will increase health expenditures by about $118 billion through 2023. The Congressional Budget Office, the chamber’s accounting arm, has estimated the law would cost states about $60 billion.

The additional expense stems mainly from an expansion of Medicaid under the law. The chief actuary for the Centers for Medicare and Medicaid Services, which supervises the program, has said the expansion may add 20 million Americans to Medicaid rolls starting in 2014.

The law is “onerous and unsustainable” for states, Upton said in a statement prepared for the hearing to examine Medicaid’s effect on state budgets.

The estimate is at odds with projections showing states will realize net savings under the law, said Nick Papas, a White House spokesman, in an e-mail. A study by the Urban Institute in Washington showed states may save as much as $131.9 billion from 2014 to 2019, he said.

Representative Henry Waxman of California, the senior Democrat on Upton’s committee, said states have “considerable flexibility in the management and design” of Medicaid, the federal-state health program for the poor. He called Republican proposals to scale back the program “radical changes that will add to the number of uninsured.”

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

To contact the editor responsible for this story: Adriel Bettelheim abettelheim@bloomberg.net

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