Who Benefits from Medicaid?

Medicaid is jointly funded by the federal government and individual state governments, but the full cost of covering new enrollees is funded by the federal government though 2020, when that share drops to 90 percent. The billions of dollars being channeled to states that have expanded Medicaid is helping to bolster their economies. And states that have not expanded are losing taxpayer dollars. One analysis found that Florida’s decision not to participate will cost its taxpayers $5 billion by 2022. The net cost to taxpayers in Texas will be $9.2 billion.

One way Medicaid expansion boosts state economies is by improving the bottom line for the hospitals and clinics that serve mostly low-income communities. Today, many safety-net health providers are seeing more insured patients, which means they provide less care that goes unpaid. This new revenue is supporting new clinics, equipment, and staff — which may helping them to better manage patients’ conditions and head off the complications that drive up costs.

Medicaid also serves the broader health system by evaluating new approaches to paying for and delivering care. State programs have been at the forefront of the national effort to test “medical homes,” which offer patients help from a team of medical professionals and well-coordinated care. Medicaid and safety-net providers have also led the way in use of health information technology. The Commonwealth Fund’s two national surveys of community health centers show that their adoption of electronic health records outpaced office-based physicians (93 percent compared with 78 percent of office-based physicians).