The Cost to States of Not Expanding Medicaid

A man completes enrollment forms at a health care event.

If the nineteen nonexpansion states expanded Medicaid, they would see economic savings.

 

The Issue

States that have expanded Medicaid report net budget savings, furthering the claim that nonexpansion states are losing out on potential economic savings.

Key Findings

From 2017 through 2026:

  • For every $1 a state spends on Medicaid expansion, it draws in $7 to $8 from the federal government.

  • By expanding Medicaid, the 19 states that have yet to expand Medicaid would see an estimated $27 billion drop in uncompensated care spending.

  • If the 19 holdout states expanded Medicaid, the federal government would spend $43 billion less on uncompensated care and $129 billion less on marketplace subsides.

Conclusion

For most states with relevant analyses, net budget gains are expected for the foreseeable future, even after states begin paying 10 percent of expansion costs.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.