Dueling reports on health law’s costs issued as governors testify on Capitol Hill

“With this report, we see the true cost to states, who are already facing a collective $175 billion budget shortfall, of this unsustainable expansion,” Senate Finance Committee ranking member Orrin Hatch (R-Utah) said in a statement. “It’s time for Congress to peel this program back by putting states, not the federal government, back in charge.”

Several earlier estimates reported that the healthcare reform law would provide a net savings to states:

• The left-leaning Urban Institute found that “a worst-case scenario will thus see states realizing net budgetary savings of $40.6 billion during 2014-2019. In a best-case scenario, those gains will reach $131.9 billion.”

• The Lewin Group estimated “over the 2010 through 2019 period, state and local governments will save $107 billion, primarily due to savings in safety-net programs serving the uninsured.”

• Medicare’s chief actuary estimated that “the net impact of the Medicaid and [the Children’s Health Insurance Program] provisions on State Medicaid costs is a reduction totaling $33 billion through fiscal year 2019.”

Part of the discrepancy comes from the different time frames the reports look at, because the federal government picks up 100 percent of the Medicaid expansion until 2017. The bicameral Republican report looked at funding through 2023.

The Obama administration is keenly aware of the political risks of the Medicaid expansion as states continue to struggle with their budgets. On Monday, the president told the governors in town for the winter meeting of the National Governors Association that they should create a bipartisan committee to discuss with his Health and Human Services Department ways to make the program more flexible.

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