Medicaid expansion reduced spending per enrollee in its first year

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A CMS report on patterns in state-level healthcare spending showed the expansion of Medicaid eligibility led to an increase in total spending in expansion states, but a decline in spending per enrollee.

First published in Health Affairs, the data set covers 1991 to 2014, the first year the expansion and the Affordable Care Act’s insurance exchanges were implemented. In states which expanded Medicaid, spending rose by 12.6 percent between 2013 and 2014, compared to 6.2 percent jump in nonexpansion states. Per-enrollee spending, however, fell by 5.1 percent in expansion states during the same time period, while growing by 5.1 percent in nonexpansion states.

“Trends in per enrollee Medicaid spending can be attributed to the coverage expansion, which increased the share of relatively less expensive enrollees relative to the previous Medicaid beneficiary population mix in expansion states,” the study said. “Adult enrollees, whose per enrollee spending is 70 percent lower than spending for disabled enrollees and 62 percent lower than spending for aged enrollees,10 accounted for just 17 percent of total Medicaid enrollment in nonexpansion states but 43 percent in states that expanded coverage (up from 32 percent in 2013).”

Read the full study at the link below: