State spending for Medicaid expansion under Obamacare is expected to reach $8.5 billion in 2018, a $4 billion increase from 2016, according to a national report released Thursday.The report, assembled annually by the National Association of State Budget Offices, or NASBO, shows that median general fund spending on Medicaid grew 2.7 percent in fiscal 2016 and is estimated to grow at 5.2 percent in fiscal 2017. That outpaces growth in median general fund revenue, which reached 2.4 percent in fiscal 2016 and 2.5 percent in fiscal 2017. Medicaid is a medical coverage program that is jointly funded by federal and state governments and is the second-largest part of state budgets. Prior to Obamacare, states varied in their requirements for Medicaid enrollees, such as covering only pregnant women or people with disabilities. The federal healthcare law attempted to create a more uniform definition by mandating that all states expand it to low-income residents, but a 2012 decision by the Supreme Court made expansion optional for states. As a result, 19 states have not expanded the program, meaning that coverage and government spending isn't as high as it could be.
The federal government initially picked up the full cost of Medicaid expansion for many of the 31 expansion states and the District of Columbia, most of which pay for 5 percent of expansion beginning in 2017. The NASBO report reflects an increase in the state share, and states are expected to take on 10 percent of expansion by 2020.
NASBO found that taking on their share of Medicaid expansion will increase state spending on the program to $6.2 billion in fiscal 2017, after reaching $4.5 billion in 2016. The numbers reflect only the expansion amounts and not others who are covered under Medicaid, where the federal government assists less in the share of costs.
The $4.5 billion figure is a reflection of how some states, known as "early expansion states," began the expansion earlier than the 2014 date set in the law, meaning that by 2016 they had already begun paying part of the share of expansion.
Federal funding on Medicaid expansion is expected to continue to grow, from $74.1 billion in fiscal 2016 to roughly $80.9 billion in fiscal 2017. It is projected to reach $83.3 billion in fiscal 2018.
Republicans in Congress are working on a healthcare bill that would roll back Obamacare's Medicaid expansion, allow states to implement work requirements and would set a fixed rate for federal spending on Medicaid rather than have it be open ended.