States that expanded Medicaid in 2014 both increased and decreased their Medicaid spending that year, compared with the nonexpansion states, according to an analysis from the Centers for Medicare & Medicaid Services.

The 26 states, along with the District of Columbia, that expanded Medicaid eligibility by the end of 2014 had an increase in total Medicaid spending of 12.3% over 2013, compared with an increase of 6.2% in nonexpansion states.

Spending per person, however, was a different story. In the nonexpansion states, per-person spending on Medicaid rose by 5.1% from 2013 to 2014, but the expansion states decreased spending by 5.1%, reported David Lassman and his associates of the CMS Office of the Actuary, Baltimore (Health Aff. 2017. doi: 10.1377/hlthaff.2017.0416).

The expansion of coverage “increased the share of … less expensive enrollees relative to the previous Medicaid beneficiary population mix,” the investigators said. Medicaid expansion brought in more relatively inexpensive adults – 43% of total enrollment in 2014, compared with 32% in 2013 – and reduced the proportion of disabled and aged enrollees, whose cost per person is much higher, they explained.

Private health insurance spending showed a different pattern: Nonexpansion states had larger increases in both higher per-person and overall costs than did expansion states. Per-person costs were up 3.4% for nonexpanders and 2.7% for expanders, and total costs rose 6.8% in nonexpansion states and 4.6% in the Medicaid expanders, Mr. Lassman and his associates said. Higher per-person spending growth for enrollees in the state and federal marketplaces, compared with nonmarketplace individual coverage, was partially responsible for this trend, they pointed out.


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