Expanding Medicaid Coverage Can Save State and Counties Money

 Wisconsin is one of 19 states that rejected federal funds to pay for Medicaid expansion.  The federal government covers 100 percent of the costs of expansion for three years and 90 percent of costs thereafter.  Governor Walker expressed concern about future state costs when refusing the expansion money.

Studies of the financial effects of expansion are beginning to show cost savings.  An issue brief from the State Health Reform Assistance Network of the Robert Wood Johnson Foundation reported that savings in criminal justice and social services budgets could occur as a result of coverage for low-income adults through these mechanisms:

  • Direct savings from Medicaid reimbursement for the inpatient care provided to inmates in the community.
  • Reductions in re-incarceration rates as a result of treatment upon release; and
  • Reductions in new entrants to jail and prison.

In Washington state, for example, prior to Medicaid expansion, less than 20 percent of inmates were enrolled in Medicaid upon release from a correctional facility.  Less than a year after expansion, more than 60 percent secured coverage.  See Medicaid Expansion and Criminal Justice Costs: Pre-Expansion Studies and Emerging Practices Point Toward Opportunities for States.”

“States Expanding Medicaid See Significant Budget Savings and Revenue Gains,” also from the State Health Reform Assistance Network, found that “expansion generates savings and revenue which can be used to finance other state spending or to offset much, if not all, of the state costs of expansion.”  Find it here.






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