Spending Under the Healthcare Reform Act Saves States $14 billion

Patient Protection and the Affordable Care Act (PPACA) Will Produce Savings.

The Urban Institute’s new healthcare study suggests State legislators can expect a net savings in healthcare spending of $14 billion from 2014 to 2019.

Authors of the study assert that Patient Protection and the Affordable Care Act (PPACA) will produce savings that increase federal spending on uninsured individuals and additional healthcare functions that states previously paid for.

For example, as Medicaid’s population grows, state spending will increase by $80 billion to cover this expansion, according to the report, but that number will be offset by $66 billion in federal funds to cover existing Medicaid beneficiaries. The PPACA will eliminate Medicaid eligibility for certain adults with incomes that are over 138% of the federal poverty level, saving states $69 billion. The report says that the federal government would save up to $87 billion, and states would collectively save $52 billion by lowering the number of people without insurance by 12.5% to 25%. In addition, Medicaid’s expanding coverage to people with mental illnesses could save states between $11 billion and $22 billion, according to the study.

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