Medicaid Expansion Would Pay For Itself

August 14, 2013

Cost Savings, New Revenue Would Offset Cost of Expansion

Virginia has many options to ensure that expanding Medicaid can pay for itself and provide coverage to nearly 400,000 uninsured Virginians. That’s because Virginia currently funds a wide range of services for the uninsured with state general fund dollars. To the extent that Medicaid would begin paying for some of those services with federal dollars, it would both reduce state costs and provide funding for unmet health needs in Virginia.

While expansion is forecast to cost the state $1.60 billion from 2014 to 2022 – with most of that cost coming in the later years – the $1.64 billion in savings from expansion would offset all of the costs and ease state budget pressures.

Over the next nine years (2014-2022), savings would come from six key sources:

  • $637 million from reducing indigent care funding by 50 percent.
  • $292 million from insuring patients treated through Community Service Boards for mental health and substance abuse issues.
  • $290 million from covering the inpatient hospital care for state prisoners.
  • $173 million from slowing growth in premium increases for the state employee health insurance plan.
  • $142 million from capturing savings from other provisions of the Affordable Care Act.
  • $104 million from replacing general funds with federal funds used to support programs for low-income people who currently do not qualify for Medicaid.

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