How Much Will Medicaid Cost in the Future and Why: Federal Projections

Covering more than 60 million individuals, Medicaid is the nation’s primary health insurance program for low-income and high-need Americans.

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Major federal funding is allocated by the Affordable Care Act’s expansion of Medicaid to a national eligibility floor of 138% of the federal poverty level (FPL).  The Supreme Court upheld the ACA but limited the federal government’s ability to enforce the Medicaid expansion to low-income adults, effectively making implementation of the Medicaid expansion a state choice.

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The report below examines the latest Congressional Budget Office (CBO) projections for federal Medicaid spending over the 2013-2023 period. CBO’s budget projections, also referred to as “baseline” projections, reflect CBO’s best judgement about how the economy along with other factors will affect federal revenues and spending under the existing laws.

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It is important to understand the CBO baseline estimates because they are the basis to evaluate the federal cost and coverage implications of proposed federal policy changes. Federal budget and federal deficit reduction have ignited an active debate and discussion. The fiscal effect of any federal policy changes will be measured against the CBO baseline.

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