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March 2013 Policy Study, Number 13-3


Just Say NO – and Keep Saying NO – to Federal Health Care Exchanges and Medicaid Expansion


Iowa Medicaid Expansion Impact



In evaluating Medicaid expansion, the state authorized reports by the Milliman group, which specializes in Medicaid actuarial projections. These reports, submitted December of 2011 and 2012, provide both insight and warning to those encouraging expansion.


Milliman predicts a three-year enrollment increase from 110,000 to 181,000 people, caused by the coverage expansion itself, as well as woodwork and crowd-out enrollees. The prediction is that by June of 2015 over 710,000 Iowans would be on government provided health care.[57] This would be a 4.4 percent increase.


Milliman drops any discussion of the potential number of new enrollees after the first three years and estimates costs based on the initial numbers.


The December 2011 report projects that the expansion cost through FY2020 would be between a negative $72 million (or decrease) and an increase of $237 million.[58] This does not sound too bad, if you are a supporter of government health care.


However, by December 2012 the Milliman report increased those projections to a “low scenario” increase of $171.2 million and a “moderate” increase of $536.6 million. This is an increase in state funding costs, even with “100 percent federal payment” of providers!


The estimate of projected costs to Iowa taxpayers, done by a reputable actuarial firm, more than doubled from the 2011 report to the 2012 report. Even if the “low” increases for each year were the real numbers, the cost projections went up by almost $250 million. And if, as in states such as Arizona and Maine, these estimates are low, the state and taxpayers could see budget increases of almost $1 billion for Medicaid alone. This projection is not a political statement by the Governor, or Republican House or Senate members – this is a qualified academic projection of reality. What will the 2013 report cost estimate be?




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