Study Backs Kentucky Medicaid Expansion

Gov. Steven L. Beshear of Kentucky released a study Thursday predicting that his expansion of Medicaid under the Affordable Care Act would generate a positive fiscal impact of nearly $1 billion for the state over the next seven years.

The findings from Mr. Beshear, a Democrat, countered a drumbeat of Republican warnings that extending the program to nearly 400,000 additional Kentuckians to date — far more than state officials had predicted — would eventually impose a heavy burden on state taxpayers. For every state that decides to expand Medicaid under the new law, the federal government will cover the full cost through 2016, but then gradually lower its share to 90 percent by 2020.

According to the new report, by Deloitte Consulting and the University of Louisville’s Urban Studies Institute, Kentucky’s cost of covering the new Medicaid enrollees will start at $74 million in 2017 and grow to $363 million by 2021.

Like most states, Kentucky already spends more of its budget on Medicaid — about $1.9 billion in the 2014 fiscal year — than almost anything else. But the report found that the expense of covering the new enrollees would be more than offset by the positive economic effects of expanding the program. They include new Medicaid revenue to health care providers — totaling more than $1 billion in 2014 alone, according to the report — and the resulting creation of jobs in health care and other professions.