Health Care Reform and the State Budget: Savings likely to fully or partly offset modest new costs

An OK Policy issue brief looks at the expected impact of the new federal health care law, the Affordable Care Act, on the state budget. Its main findings:

• Most studies of the impact of the Affordable Care Act have concluded that increases to state Medicaid budgets will be modest.
• Some studies have concluded that overall state spending will decrease as a result of the new law.
• Experts at the Urban Institute and the Oklahoma Health Care Authority project that Oklahoma Medicaid costs will increase between $212 and $789 million in the coming years.
• Estimates by the Oklahoma Council of Public Affairs and Cato Institute that the Affordable Care Act will impose additional state costs of $11 billion by 2023 are way out of line with other estimates and are based on mistaken assumptions and methodologies.

Click here for the full 8-page issue brief and here for the 1-page summary.

See our blog post on this issue from October 2011 and this blog post following the Supreme Court’s decision giving states the option of expanding Medicaid.