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The report, from the Charles Koch Institute and the American Legislative Exchange Council (ALEC) estimates that, even after expanding Medicaid, the state of Arkansas would end up spending $4,162 per recipient, compared to $8,679 for the uninsured.
However, using the federal Medicaid expansion to expand coverage to the 50,000 people who are uninsured in their state, rather than using state funds to expand Medicaid, would reduce Arkansas’ cost per recipient to $6,313.
“A better approach would be to use federal Medicaid funding to help cover people while at the same time saving the states money,” the report says. “In addition to their heavy Medicaid bill, states face a major fiscal challenge: health care costs continue to rise.”
What’s more, the report notes, the cost of health care for the uninsured rises at rates higher than the national average.
“Nearly 9 million individuals who are uninsured are likely to be covered under Medicaid expansion,” it says, estimating that their cost to states could amount to between $1 billion and $2 billion.
It also notes that the Affordable Care Act (“Obamacare”) was designed to control health costs by moving people off Medicaid and onto private insurance.
“The Healthy Arkansas Plan would provide insurance coverage to virtually all who cannot obtain it through the private market, and would reduce the cost of care for those who have access to insurance through their employers,” the report states.
The report is the second Koch brothers-aligned think tank to offer a model for the Medicaid expansion in their states.
The Cato Institute released a study in August finding that, after 10 years, “the net present value” of the Medicaid expansion, when factoring in savings and investment, is “negative.” The state’s Medicaid costs in 2017 are projected to be between $3 billion and $4 billion — the result of a
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