Net Effects of the Affordable Care Act on State Budgets

Stan Dorn, Matthew Buettgens

The Affordable Care Act will affect state budgets in many ways. State Medicaid spending on low-income adults will increase between $21.1 billion and $43.2 billion during 2014-2019. But during this same period, the ACA will save states and localities between $83.8 billion and $153.0 billion by letting them (a) shift higher-income adults from Medicaid into coverage where subsidies are funded entirely by the federal government; and (b) substitute newly available federal Medicaid dollars for prior state and local spending on uncompensated care and mental health services. Altogether, net state and local gains will total between $40.6 billion and $131.9 billion.

---

Usage and reprints: Most publications may be downloaded free of charge from the web site and may be used and copies made for research, academic, policy or other non-commercial purposes. Proper attribution is required. Posting UI research papers on other websites is permitted subject to prior approval from the Urban Institute—contact [email protected].

If you are unable to access or print the PDF document please contact us or call the Publications Office at (202) 261-5687.

Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Copyright of the written materials contained within the Urban Institute website is owned or controlled by the Urban Institute.