Net Effects of the Affordable Care Act on State Budgets

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.

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