Massachusetts Predicts Net Savings for Medicaid Expansion 

ThinkstockPhotos-164939541BOSTON (AP) — Many states that opted to expand Medicaid under the federal Affordable Care Act have seen enrollments surge well beyond projections, raising concerns that the added costs will strain their budgets when federal aid is scaled back starting in two years, an Associated Press analysis shows. But Massachusetts, a pioneer of health care reform, appears well situated going forward. Here’s a look at what’s happening in the state:

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THE MASSACHUSETTS BLUEPRINT

Massachusetts passed a law in 2006 to expand insurance coverage, and the law became a blueprint for President Barack Obama’s 2010 health care overhaul. Today,Massachusetts has the highest rate of insured residents in the country, with about 97 percent covered, and passage of the federal Affordable Care Act has given the state a chance to enhance that coverage, state officials say.

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THE FEDERAL MATCH AND MEDICAID

Massachusetts received a federal matching rate of 50 percent before the federal law. The rate grew to 75 percent in 2014 and will continue to rise each year before reaching 93 percent in 2019 then settling at 90 percent in 2020, state officials say. The state projected about 325,000 Medicaid expansion enrollees for 2014 with no significant change expected through 2020. The federal match enhancements associated with the federal law are expected to more than offset the additional costs to Massachusetts of Medicaid expansion.

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THE FEDERAL MATCH AND MASSACHUSETTS BUDGET

In the state fiscal year that ended June 30, estimated spending for the Medicaid expansion population came to about $1.7 billion before federal matching funds. The state budget for the new fiscal year is $38.1 billion, or a net state general fund of about $28 billion, excluding federal revenues. About 80 percent of the federal revenues received by the state are federal matching funds for Medicaid. State health officials say that when the federal matching funds and savings from consolidating other state health coverage into Medicaid is factored in, Massachusetts will realize a net state savings for its Medicaid expansion.

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