Savings and Revenue Options for Policymakers

Costs - whether they're perceived or real - are often the barrier to expanding Medicaid or protecting it against harmful cuts. Advocates have an opportunity to change the way policymakers think about Medicaid costs.  First, many of the perceived costs associated with the Medicaid expansion are outweighed by the savings the state would see in reduced uncompensated care and other expenses associated with the uninsured. Second, advocates can help policymakers move to a rational, progressive approach to sustaining the Medicaid program over the long term. 

Strategies to support sustainable Medicaid funding include: 

• Promoting the savings that expanding Medicaid may bring to your state
• Maximizing Medicaid revenue
• Reforming Medicaid payment and delivery systems to save your state money

Promote the savings that expanding Medicaid may bring to your state

Resources:

• Estimates of state costs associated with Medicaid expansion (that do not take into account all state savings)
• Guidance on Analyzing and Estimating the Cost of Expanding Medicaid

Examples:

• Arkansas finds expanding Medicaid could save the state $700 million, and Arkansas advocates promote Medicaid as a good deal for the state
• Pennsylvania advocates promote the savings associated with expanding Medicaid

Maximize Medicaid Revenue

Tactic: Increase provider and HMO taxes, and use this revenue to bring more federal Medicaid matching funds to the state to support Medicaid and health care.

Resources:

• Using provider fees to expand Medicaid

Examples:

• A report in Colorado examines various funding sources for sustaining the Medicaid expansion, including the state's existing provider fee

Tactic: Increase tobacco taxes, alcohol taxes, or taxes on sweetened beverages, and earmark the revenue for Medicaid.

Resources:

• Community Catalyst Campaign Guide:Raising Tobacco Taxes toSupport Health Access
• Resources on designing a sugar-sweetened beverage tax to support Medicaid or CHIP programs

Examples:

• Example: Advocates in Maryland succeeded at increasing the alcohol tax to help fund Medicaid

Tactic: Encourage policymakers to scour the state budget and identify current state services that could bring in additional federal matching payments.

Resources:

• Optimizing Federal Medicaid Revenues in Hard Times: A Primer

Reform Medicaid Payment and Delivery Systems 

Tactic: Promote payment and delivery system reforms that would save Medicaid dollars while improving patient care.

Resources:

• A webtool to help you identify how your state could better manage its Medicaid dollars
• A toolkit to help you promote payment reforms that would reduce potentially preventable complications and save millions of dollars

Examples:

• Advocates in Ohio promote more efficient payment and delivery systems as alternatives to more harmful Medicaid cuts