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Healthcare reform fallout: Which states are the winners?

States' Medicaid programs will have to grow dramatically to meet the demands of healthcare reform. Those states that have already started the process could come out ahead financially.

By Ron SchererStaff writer / March 26, 2010

Rep. George Miller (D) of California speaks to an aide during the House Committee Rules meeting to decide on the rules for the debate of the healthcare fixes – known as the reconciliation bill – Thursday. The bill, which tweaks Medicaid reimbursement formulas for states, passed that House later in the day.

Manuel Balce Ceneta/AP

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Under the nation’s healthcare reform plan, the nation’s Medicaid system will grow as one of the main organizations to implement the goal of expanded medical coverage.

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But it appears that, from a financial standpoint, some states will be winners and some will be losers in this new arrangement.

Here's a look at why some states may stand to benefit. Later today, the Monitor will look at other states, which are complaining that it will cost their taxpayers a lot more money in the future.

The biggest winners, state officials and Medicaid experts say, could be those states that have already taken an important step toward expanding their own Medicaid programs: covering childless adults.

The reason for the coming windfall: These states are already paying for something that the new healthcare plan will soon mandate, and as the law's provisions begin to kick in, the federal government will actually pick up much of the burden that these states are now bearing.

The winners: 11 states plus D.C.

The 11 so-called "expansion states" states are: Arizona, Delaware, Hawaii, Maine, Massachusetts, Minnesota, New York, Pennsylvania, Vermont, Washington, and Wisconsin, plus the District of Columbia.

Currently, states that cover childless adults receive a 50 percent reimbursement for their costs. But the federal share of that reimbursement is set to increase, according to the bill of healthcare fixes, which tweak some of the numbers in the healthcare bill already passed and signed by President Obama.

(The fixes bill was passed by the Senate and the House Thursday and now goes to Mr. Obama to be signed into law.)

In 2014, the federal government will pick up 75 percent of the costs. By 2020, the fed’s share will grow to 93 percent.

By contrast, states that have not yet begun to cover childless adults will get federal reimbursements to cover 100 percent of their programs to start, but over time they will have to start paying for a portion of the cost. In other words, their expenses will eventually grow, while those of states that got a head start will gradually shrink.

Although it’s hard to quantify how much these states will save as a result of the changes, it will total in the billions of dollars annually.

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