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New Federal Incentive Lowers the Estimated Cost of Medicaid Expansion (April 2022)

By Phillip Steiner, M.A., Kari M. Bruffett | April 25, 2022

New Federal Incentive Lowers the Estimated Cost of Medicaid Expansion (April 2022)

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Approximately 148,000 Kansans, including 109,000 adults and 39,000 children, are estimated to newly enroll in KanCare if Medicaid were to be expanded in January 2023. Expansion would offer a coverage option to nearly 88,000 adults who currently fall in the “Medicaid coverage gap,” and a new federal incentive has changed the financial equation for states that have not yet expanded Medicaid.

This issue brief provides an updated estimate of the impact that expanding Medicaid coverage would have on KanCare enrollment and expenditures.

Key Points include:

  • Estimated new enrollment represents an increase of approximately 36.0 percent from the average monthly KanCare enrollment pre-pandemic. However, net state KanCare spending is projected to be just 1.4 percent higher (0.14 percent higher per year on average) over a 10-year period compared to projections based on the pre-pandemic trend.
  • The American Rescue Plan Act of 2021 would provide an estimated $418 million in savings to Kansas over two years if Medicaid were expanded to low-income adults under the terms of the ACA.
  • This estimate differs from state fiscal notes and some other estimates because it includes the indirect effect of expansion on enrollment of children and currently eligible adults.

*KHI also is providing detailed technical notes for those interested in further understanding the assumptions and data used to create the estimates.

Click here for a list of other KHI publications on Medicaid Expansion.

The Kansas Health Institute supports effective policymaking through nonpartisan research, education and engagement. KHI believes evidence-based information, objective analysis and civil dialogue enable policy leaders to be champions for a healthier Kansas. Established in 1995 with a multiyear grant from the Kansas Health Foundation, KHI is a nonprofit, nonpartisan educational organization based in Topeka.