Home » Blog » State Contributions in Reform

State Contributions in Reform

The Executive Office of the President’s Council of Economic Advisers recently released a report entitled “The Impact of Health Insurance Reform on State and Local Government.” This is an especially hot button issue, for states have concerns of any increase to their budgets (mainly through proposed Medicaid expansions) especially when so many are facing major fiscal crises. The report analyzes the effects of the House and Senate HELP bills in an assessment of current expenditures for the uninsured and savings that will be realized through reform.

Below are the findings for current spending in California-subsidized programs. Through insurance reform like Medicaid expansion and a more effective market, CEA estimates that by taking away reliance on these programs, California will save AT LEAST $2.14 billion a year from:

-Medically Indigent Services Program (MISP) for low-income adults in 24 counties: $1.613 billion
-County Medical Services Program (CMSP) for low-income adults in 36 counties: $283 million
-Major Risk Medical Insurance Program (MRMIP) for high-risk individuals: $37.7 million
-Hidden tax on private premiums for uncompensated hospital care: $210 million

When California begins to contribute to the Medicaid expansion, CEA estimates the state will be responsible for an additional $195 million in costs due to another 1.7 million people entering the program. In total, and not taking into account other local government programs, reform will more than offset the increased state contributions and California will save at least $1.95 billion a year. You’re welcome, Arnold.