Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? Allison Valentine, Robin Rudowitz, Kaiser Family Foundation Don Boyd and Lucy Dadayan, Rockefeller Institute of Government The Congress is currently debating the American Health Care Act (AHCA), which would not only repeal and replace the Affordable Care Act (ACA) but also make far-reaching changes to the structure and financing of Medicaid. The AHCA would use a per capita cap policy or block grants to cap federal funds to states for Medicaid. Facing reductions in federal Medicaid funding, states could offset lost federal dollars by raising taxes or reducing other state spending (like K-12 education), or states could reduce spending in Medicaid by finding savings or (more likely) by restricting eligibility, benefits, or payments to providers. However, many efficiencies were adopted by state Medicaid programs during the last two major recessions when revenues dropped and budgets were constrained leaving states with few options for easy ways to trim additional spending in the future. On March 13, 2017 the Congressional Budget Office (CBO) estimated that the AHCA would reduce federal Medicaid spending by $880 billion over the 2017-2026 period. By 2026, Medicaid spending would be about 25% less than what CBO projects under current law. In this analysis, we examine the fiscal implications of state actions to offset the loss of federal Medicaid funding to maintain rather than cut Medicaid programs. This analysis is intended to be illustrative and not predictive of actual state outcomes. In contrast, the CBO estimate of a 25% reduction in federal Medicaid funding by 2026 reflects projections and accounts for federal changes in policy, state responses to the policy change, and reductions in coverage. What does this analysis do? In this analysis, we present three scenarios of reductions in federal Medicaid spending and examine fiscal implications if all reductions had been in full effect in FFY 2015 (the most recent year for which Medicaid spending data is available). In these scenarios, we assume states fill the gaps caused by federal funding reductions by increasing state spending for Medicaid. To achieve those increases, we examine potential implications for state taxes and education spending by state and by groups of states including expansion status, political party, region and poverty quartile and highlight the groups that could experience the largest effects. These results are illustrative: each state would likely make different policy choices, and states could implement a combination of approaches, or choose not to completely offset the federal reduction. What does this analysis not do? Unlike the CBO estimates, this analysis does not make projections or anticipate changes to state Medicaid programs through reducing eligibility levels, benefits, or reimbursement rates. If states do undertake these changes to their Medicaid programs, federal reductions would likely be larger. This analysis of the impact in FFY 2015 does not assume that states will drop coverage and does not account for states that may have adopted the expansion in the future. What were the estimated reductions in federal spending in three scenarios? This analysis estimated reductions in federal Medicaid spending under three scenarios: (1) repeal of the ACA enhanced match rate for expansion adults ($27 billion), (2) repeal of the ACA plus a 10% reduction in federal Medicaid spending for the non-expansion population ($53 billion), and (3) repeal of the ACA plus a 20% reduction in federal Medicaid spending for the non-expansion population ($79 billion). All estimates assume that the full effect of the reductions are experienced in FFY 2015. Beyond the repeal of the ACA enhanced matching funds, the reductions are not based on specific policy changes but rather are based on illustrative potential federal Medicaid spending reductions. If states were to maintain Medicaid services, these reductions would require increases in state Medicaid funding to fill in the gaps in federal funding. Median state Medicaid spending per resident was $534 in FFY 2015. Under the three scenarios, the reduction in federal Medicaid funds would result in a median increase of state Medicaid spending per resident ranging from 17.2% to 40.3%. What are the potential implications for state taxes and education? States could choose to respond in many ways. For example, they could raise taxes or reduce education spending to fill in gaps in federal funding for Medicaid. Median state tax per resident was $2,715 in 2015. If states opt to raise taxes, the median increase in state taxes per resident would range from 3.5% to 8.1% under the three scenarios; if states increased the largest state tax, the median would range from 8.4% to 18.1%. For most states (29 states), the income tax is the largest state tax followed by sales tax (15 states). Median total spending per pupil for education was $10,961 in 2015. If states opted to fill the gap by reducing state government spending for education, states could face median reductions in state funding for K-12 education per pupil of 10.9% to 24.1% and total funding for K-12 education spending per pupil of 5.5% to 13.7%. How are different groups of states affected by reductions? Due to the changes in the enhanced match rate, states that have adopted the Medicaid expansion will experience larger federal funding reductions; this outcome is true across states with Republican and Democratic governors. For example, in the scenario that would repeal the ACA enhanced match rate and reduce traditional Medicaid spending by 20%, expansion states would face higher median tax increases and Figure 16 ES 1 larger reductions in education to fill the federal How Could States Fill the Gaps in Reduced Federal Medicaid funding gaps compared to non-expansion states Funding? (ES 1). This increased budget pressure could Dem/Ind Expansion Rep. Expansion Dem./Ind. Non-Expansion Rep. Non-Expansion 9.4% 8.6% make it difficult for states to maintain the 6.7% 5.3% Medicaid expansion. Funding reductions that go beyond eliminating the enhanced match for the Median Decrease in K-12 spending per Pupil ACA Medicaid expansion and entail cuts to the Median Increase in State Taxes per Resident traditional Medicaid program could have a -9.5% -10.2% disproportionate effect on states with high -14.6% -16.5% poverty. Even though these poorer states spend Scenario Assumes $79 Billion Reduction from a Repeal of the ACA Enhanced Match + 20% Reduction in Traditional Medicaid (FY less per resident on Medicaid, their federal 2015 Dollars) reimbursement rate is relatively high, and so the SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016 and the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction; and National Center on Education Statistics, Digest of Education Statistics, K-12 Enrollment - Total impact of federal cuts is large. Students, All Grades (Excludes AE) [Public School]. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 2 Medicaid has a unique role in state budgets. As a result of the federal matching structure, Medicaid is a spending item but also the largest source of federal revenues for state budgets. In FY 2015, Medicaid accounted for 28.2% (or $523 billion) of total state spending (including state and federal funding) for all items in the state budget, but 15.6% (or $193 billion) of all state spending (from general fund and other state funds), a far second to spending on K-12 education (24.8%, or $307 billion). Medicaid is the largest single source of federal funds for states, accounting for more than half (56.8%, or $329 billion) of all federally supported spending by states in SFY 2015, according to data from the National Association of State Budget Officers (Figure 1). Due to the federal match rate, as state Medicaid spending Figure 1 increases during economic downturns, so does Medicaid in State Budgets, 2015 federal funding. The match rate also gives states Medicaid Elementary & Secondary Education Other support and flexibility to address health care emergencies, needs and state health priorities 34.4% without a pre-set limit on federal funds. States 52.3% 59.6% must balance their budgets annually. Since states 8.8% pay for more than 40% of total Medicaid on 19.5% average, states have incentives to constrain 24.8% 56.8% 28.2% Medicaid spending by restricting provider 15.6% payment rates, controlling prescription drug Total State Spending (State & Federal Funds) State Funds (General & Other Funds) Federal Funds costs and implementing payment and delivery $1.85 Trillion $1.24 Trillion $578.6 Billion system reforms. SOURCE: Kaiser Family Foundation estimates based on the NASBO’s November 2016 State Expenditure Report (data for Actual FY 2015.) Congress is debating the AHCA, which includes reductions to federal financing combined with fundamental restructuring of Medicaid financing. On March 13, 2017 the Congressional Budget Office (CBO) estimated that the AHCA would reduce federal Medicaid spending by $880 billion over the 2017-2026 period. By 2026, Medicaid spending would be about 25% less than what CBO projects under current law. The CBO estimate reflects projections and accounts for federal changes in policy, state responses to the policy change, and reductions in coverage. In this analysis, we present three scenarios of reductions in federal Medicaid spending and Figure 2 State Implications of Reduced Federal Medicaid Spending examine fiscal implications if states fill these financing gaps to maintain their programs and if What drives Medicaid spending? all reductions are assumed to be in full effect in FFY 2015 (the most recent year for which Number of People Cost Per Person (Reflects benefits and Total Medicaid Spending Enrolled Medicaid spending data is available). To fill these health care costs) (State and Federal Spending) gaps in financing and maintain current Medicaid programs, we assume states will increase state What happens if federal Medicaid funds are reduced? spending for Medicaid by increasing state taxes States can reduce the number of people enrolled, benefits covered, or provider reimbursements or reducing education spending. This analysis is OR unlike the CBO estimate, which makes States can increase state Medicaid spending by increasing state revenue projections and accounts for changes in policy, or cutting other state spending state responses to make changes to Medicaid programs, and reductions in coverage (Figure 2). Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 3 This brief explores three scenarios of federal Medicaid spending reductions and the potential fiscal implications of different state responses to offset such losses. The analysis was conducted by the Kaiser Program on Medicaid and the Uninsured and the Rockefeller Institute of Government. We assumed that policies were fully effective in FFY 2015 (the most recent year for which Medicaid spending data is available). As noted earlier, unlike the CBO estimate, this analysis does not make projections and does not assume that states make changes to Medicaid programs or reduce coverage. This analysis examined three scenarios of reductions in federal Medicaid spending. The magnitude of the reductions was calculated by adjusting the match rate for the expansion population from an estimated 90% when fully implemented to a state’s traditional match rate. We used estimated spending for the expansion group for FFY 2015 (spending data for states that expanded mid-year in FFY 2015 or in FFY 2016 were adjusted to account for increases in enrollment and spending for the expansion population). Beyond the repeal of the ACA enhanced matching funds, the reductions are not based on specific policy changes but rather based on estimates of potential federal Medicaid spending reductions. The total amount of federal Medicaid reductions in each scenario is displayed in Figure 3 and described below: (1) Repeal ACA enhanced matching funds. Figure 3 Assumes states would get the traditional match Estimated Reduction in Federal Medicaid Funds for Each rate for the expansion population and only Scenario includes states that have expanded Medicaid, Dollars in Billions since there would be no effect on states that did Repeal Enhanced not expand. Total federal cut: $26.7 billion. ACA Match Repeal + 10% Cut Repeal + 20% Cut (2) Repeal ACA enhanced matching funds -$26.7 + 10% cut in Medicaid for non-expansion populations. Total federal cut: $52.8 billion. -$52.8 -$78.9 (3) Repeal ACA enhanced matching funds FY 2015 Federal Medicaid Spending: $329 Billion + 20% cut in Medicaid for non-expansion populations. Total federal cut: $78.9 billion. SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016. For each of these scenarios, we examined the outcomes (increased state-financed Medicaid spending per resident) and responses (increased state taxes or decreased K-12 education spending) by state and by groups of states including state expansion status, by political party of the governor (or mayor, for DC), by region and poverty rate. (See Table 1 for more information on state groupings). See Table 1 for median reductions by group and Appendix Table 2 for reductions by state in each of these scenarios. As noted above, the first scenario calculates medians across groups for only expansion states since non-expansion states are not affected. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 4 To fill the gaps created by reductions, states would need to increase state-financed Medicaid spending per resident (outcome). To achieve those increases, states could opt to increase state taxes or reduce education spending (potential responses). These outcomes and responses are illustrative. In reality, faced with reductions in federal Medicaid funding, each state would make different policy choices and states could implement a combination of approaches, or not completely offset the federal reduction. For more details on the methods and data sources, see the Appendix. Table 1. Median Federal Medicaid Cuts by State Characteristics, FFY 2015 Repeal Enhanced ACA Repeal + 10% Cut Repeal + 20% Cut Match All States $26,676,000,000 $52,805,000,000 $78,933,000,000 By Expansion Status Expansion $26,676,000,000 $43,608,000,000 $60,540,000,000 Non-expansion N/A $9,197,000,000 $18,393,000,000 By Political Party of the Governor Democratic $17,994,000,000 $29,037,000,000 $40,081,000,000 Republican $8,589,000,000 $23,583,000,000 $38,576,000,000 Independent $93,000,000 $185,000,000 $277,000,000 By Region Northeast $8,363,000,000 $14,066,000,000 $19,768,000,000 South $2,296,000,000 $11,674,000,000 $21,052,000,000 Midwest $4,581,000,000 $9,920,000,000 $15,259,000,000 West $11,436,000,000 $17,145,000,000 $22,854,000,000 By Poverty Quartile Low Poverty $3,801,000,000 $6,700,000,000 $9,600,000,000 Low-Mid Poverty $5,642,000,000 $10,720,000,000 $15,798,000,000 Mid-Upper Poverty $15,012,000,000 $28,575,000,000 $42,139,000,000 High Poverty $2,222,000,000 $6,809,000,000 $11,397,000,000 By Expansion Status and Political Party of the Governor Expansion - Dem/Ind $17,994,000,000 $27,788,000,000 $37,581,000,000 Expansion - Rep $8,589,000,000 $15,636,000,000 $22,682,000,000 Non-expansion - Dem/Ind N/A $1,250,000,000 $2,499,000,000 Non-expansion - Rep N/A $7,947,000,000 $15,894,000,000 NOTE: Data are rounded to the nearest million. SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 5 Median state-financed Medicaid spending per resident Figure 4 was $534 in FFY 2015. To fill gaps in federal Medicaid Median Increase in State-Financed Medicaid Spending Per funding assumed in the three scenarios, states would Resident need to increase in state-financed Medicaid spending. 40.3% Median increases in state-financed spending per 27.2% resident would range from 17.2% if the enhanced match were repealed up to 40.3% to offset reductions 17.2% from both the repeal of the matching funds and a 20% reduction of federal funds (Figure 4). These increases for the largest reduction scenario would range from a Repeal Enhanced ACA Match Repeal + 10% Cut Repeal + 20% Cut 20.5% increase in state per resident spending in 2015 Median State-Financed Medicaid Spending Per Resident: $534 Virginia to an 68.2% increase in Kentucky. SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016 and the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016. The federal cuts under all of the scenarios would result in larger state spending increases per resident in expansion states compared to non-expansion states (across states with Republican and Democratic governors). High poverty states, where median state Medicaid spending per resident is the lowest ($458) compared to low- poverty states ($655), would experience the largest percent increase, particularly under the largest reduction scenario (Figures 5 and 6). For median results by group for each scenario, see Table 2. For state-by-state results of changes in state Medicaid spending per resident, see Figure 7 and Appendix Table 3. Figure 5 Figure 6 Median Increase in State-Financed Medicaid Spending Per Median Increase in State-Financed Medicaid Spending Per Resident, by Expansion Status and Political Party of Governor Resident, by Poverty Quartile Dem/Ind Expansion Rep. Expansion Dem./Ind. Non-Expansion Rep. Non-Expansion Low poverty Low-mid poverty Mid-upper poverty High poverty 55.9% 43.2% 44.4% 34.8% 38.2% 39.2% 36.2% 30.0% 31.3% 29.8% 30.4% 26.3% 27.4% 27.2% 16.9% 17.7% 17.4% 14.9% 17.9% 18.5% 16.5% 17.1% N/A N/A Repeal Enhanced Repeal + 10% Cut Repeal + 20% Cut ACA Match Repeal Enhanced Repeal + 10% Cut Repeal + 20% Cut ACA Match 2015 Median State-Financed Medicaid Spending Per Resident Dem/Ind Expansion: $780 Rep Expansion: $557 2015 Median State-Financed Medicaid Spending Per Resident Dem/Ind Non-Expansion: $451 Rep Non-Expansion: $450 Low poverty: $655 Mid-low poverty: $569 Mid-upper poverty: $478 High poverty: $458 SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016 SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016 and the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016. and the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 6 Table 2. Median Increase in State Medicaid Spending per Resident by State Characteristics, 2015 Repeal Enhanced State Medicaid Repeal + 10% Cut Repeal + 20% Cut ACA Match Spending Per Increase in State Increase in State Increase in State Resident, Medicaid Spending Medicaid Spending Medicaid Spending FFY 2015 per Resident per Resident per Resident All States $534 17.2% 27.2% 40.3% By Expansion Status Expansion $571 17.2% 31.3% 43.2% Non-expansion $450 N/A 17.4% 34.8% By Political Party of the Governor Democratic $656 17.1% 28.3% 42.6% Republican $472 17.7% 25.2% 39.9% Independent $889 14.2% 28.2% 42.2% By Region Northeast $917 15.9% 26.3% 36.1% South $474 17.4% 24.6% 42.6% Midwest $554 15.8% 26.0% 36.9% West $529 23.9% 36.0% 50.0% By Poverty Quartile Low Poverty $655 16.5% 26.3% 36.2% Low-Mid Poverty $569 17.9% 27.4% 38.2% Mid-Upper Poverty $478 17.1% 27.2% 39.2% High Poverty $458 18.5% 30.4% 55.9% By Expansion Status and Political Party of the Governor Expansion - Dem/Ind $780 16.9% 30.0% 43.2% Expansion - Rep $557 17.7% 31.3% 44.4% Non-expansion - Dem/Ind $451 N/A 14.9% 29.8% Non-expansion - Rep $450 N/A 17.4% 34.8% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016 and the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016. Figure 7 Increase in State-Financed Medicaid Spending per Resident Under Repeal of the ACA Enhanced Match + 20% Cut Kentucky 68.2% Oregon 66.7% New Mexico 66.6% Arkansas 64.8% Arizona 61.7% Nevada 61.2% West Virginia 60.7% Montana 57.7% Mississippi 57.4% District of Columbia 54.3% Michigan 53.1% Indiana 51.4% Idaho 51.2% Washington 50.0% South Carolina 49.2% Utah 48.8% Ohio 47.5% Hawaii 46.3% Alabama 45.7% Louisiana 44.2% California 43.8% Expansion State Delaware 42.6% Alaska 42.2% Georgia 41.8% Non-Expansion State North Dakota 41.3% New Jersey 40.3% Iowa 39.9% Vermont 39.6% North Carolina 39.2% Illinois Tennessee 38.2% 37.6% US Median in 2015: 40.3% Colorado 37.4% New York 37.4% Maryland 37.0% Connecticut 36.2% Rhode Island 36.1% Missouri 35.6% New Hampshire 35.0% Oklahoma 34.8% Minnesota 34.3% Maine 33.4% Pennsylvania 33.2% Florida 30.5% Massachusetts 30.5% Wisconsin 28.7% Texas 28.5% Kansas 26.5% South Dakota 25.6% Nebraska 23.2% Wyoming 20.9% Virginia 20.5% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016 and the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 7 One potential state response to offset the loss of Figure 8 Median Increase in State Government Taxes Per Resident federal Medicaid funds is to increase state taxes. We examine the percent increase in state government Change in % State Tax Change in % Largest State Tax taxes that would be required if states were to raise 18.1% taxes to offset the entire federal Medicaid spending reduction—measured by the Medicaid cut as a 11.5% 8.4% 8.1% percentage of state tax revenue. We also examined the 5.2% percent increase that would be required in a state’s 3.5% largest state-government tax, if the state raised that tax Repeal Enhanced Repeal + 10% Cut Repeal + 20% Cut to offset Medicaid cuts—measured by the Medicaid cut ACA Match 2015 Median State Tax Per Resident as a percentage of the state’s largest tax revenue. State tax: $2,715 Largest state tax: $1,144 SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016; and U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, accessed December 2016. Median state tax per resident was $2,715 in 2015. The analysis shows that the median state would need to increase taxes per resident by 3.5% to 8.1% to offset reductions in federal Medicaid funding under the three scenarios, with increases ranging from 2.4% in Wyoming to 32.1% in Alaska for the largest reduction scenario (Figure 8). When only looking at the largest state tax, the median state tax per resident was $1,144 in 2015 and the median increase would be 8.4% to 18.1%. Under the largest reduction scenario, the increase in the largest state tax would range from 6.3% in Wyoming to 121.6% in Alaska. For most states, the income tax is the largest state tax (29 states), followed by sales tax (15 states), corporate taxes (AK), property taxes (DC and VT), and severance taxes (in ND and WY). All of the scenarios would result in larger increases in state taxes in expansion states compared to non- expansion states (across states with Republican and Democratic governors). High poverty states could experience the highest median percentage increase in state taxes to offset federal reductions in federal Medicaid funding under the largest reduction scenario (Figures 9 and 10). For median results by group for each scenario, see Table 3. For state-by-state results of changes in state taxes per resident, see Figure 11 and Appendix Table 4. Figure 9 Figure 10 Median Increase in Percent State Government Tax Per Median Increase in Percent State Government Tax Per Resident, by Expansion Status and Political Party of Resident, by Poverty Quartile Governor Low poverty Mid-low poverty Mid-upper poverty High poverty Dem/Ind Expansion Rep. Expansion Dem./Ind. Non-Expansion Rep. Non-Expansion 9.4% 9.6% 8.6% 9.0% 8.1% 6.5% 6.7% 7.3% 5.7% 5.3% 5.3% 5.2% 5.5% 4.0% 5.0% 3.2% 3.4% 2.7% 3.5% 3.3% 3.4% 3.5% N/A N/A Repeal Enhanced Repeal + 10% Cut Repeal + 20% Cut ACA Match Repeal Enhanced Repeal + 10% Cut Repeal + 20% Cut 2015 Median State Tax Per Resident ACA Match Dem/Ind Expansion: $3,026 Rep Expansion: $2,916 2015 Median State Tax Per Resident Dem/Ind Non-Expansion: $2,476 Rep Non-Expansion: $2,241 Low poverty: $3,311 Mid-low poverty: $2,883 Mid-upper poverty: $2,612 High poverty: $2,514 SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016; and U.S. Bureau of the Census, 2015 Annual 2016; the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016; and U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, accessed December 2016. Survey of State Government Tax Collections, accessed December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 8 Table 3. Median Increase in State Taxes per Resident by State Characteristics, 2015 Repeal Enhanced ACA Repeal + 10% Cut Repeal + 20% Cut Total State Revenue from Increase in Increase in Increase in Increase in Increase in Increase in Tax Revenue the Largest Tax Total State the Largest Total State the Largest Total State the Largest per Resident, per resident, Taxes per State Tax per Taxes per State Tax per Taxes per State Tax per 2015 2015 Resident Resident Resident Resident Resident Resident All States $2,715 $1,144 3.5% 8.4% 5.2% 11.5% 8.1% 18.1% By Expansion Status Expansion $2,983 $1,205 3.5% 8.4% 6.1% 14.3% 9.1% 20.5% Non-expansion $2,405 $1,077 N/A N/A 3.4% 6.7% 6.7% 13.5% By Political Party of the Governor Democratic $3,023 $1,423 3.9% 9.5% 6.4% 13.2% 8.9% 17.9% Republican $2,631 $1,084 3.2% 8.2% 4.9% 10.6% 7.5% 18.1% Independent $1,171 $309 10.8% 40.9% 21.4% 81.2% 32.1% 121.6% By Region Northeast $3,533 $1,483 3.6% 9.3% 5.6% 15.5% 8.1% 21.2% South $2,454 $1,069 3.5% 8.4% 4.5% 11.2% 7.6% 19.5% Midwest $2,715 $1,122 2.9% 7.4% 4.9% 10.9% 6.8% 16.4% West $2,628 $1,170 4.4% 8.9% 6.5% 13.1% 8.9% 17.7% By Poverty Quartile Low Poverty $3,311 $1,423 3.5% 8.9% 5.3% 11.2% 7.3% 15.7% Low-Mid Poverty $2,883 $1,170 3.3% 8.1% 5.2% 12.6% 8.1% 17.5% Mid-Upper Poverty $2,612 $1,132 3.4% 8.6% 5.0% 10.6% 9.0% 18.1% High Poverty $2,514 $949 3.5% 8.3% 5.5% 14.0% 9.6% 24.3% By Expansion Status and Political Party of the Governor Expansion - Dem/Ind $3,026 $1,513 4.0% 9.6% 6.5% 14.1% 9.4% 19.6% Expansion - Rep $2,916 $1,106 3.2% 8.2% 5.7% 15.3% 8.6% 22.7% Non-expansion - Dem/Ind $2,476 $1,269 N/A N/A 2.7% 5.5% 5.3% 10.9% Non-expansion - Rep $2,241 $1,056 N/A N/A 3.4% 6.7% 6.7% 13.5% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016; and U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, accessed December 2016. Figure 11 Increase in State Government Taxes Per Resident Under Repeal of the ACA Enhanced Match + 20% Cut Alaska 32.1% Louisiana 13.9% Oregon 13.4% New Mexico 13.1% Kentucky 13.0% Rhode Island 12.5% New York 11.9% Arizona 11.7% Ohio 11.1% New Hampshire 10.4% Missouri 10.3% West Virginia 10.0% Washington 9.9% Mississippi 9.8% Pennsylvania 9.7% Arkansas 9.3% Tennessee 9.3% Michigan 9.2% California 9.1% Indiana 9.0% South Carolina 8.9% Expansion State Colorado 8.9% Delaware 8.6% Montana 8.2% Non-Expansion State Vermont 8.1% Massachusetts 8.1% Maine 8.0% Alabama 7.6% Maryland 7.5% Iowa New Jersey 7.5% 7.5% US Median in 2015: 8.1% Texas 7.4% Connecticut 7.3% Illinois 7.0% Nevada 6.8% Florida 6.7% Oklahoma 6.7% North Carolina 6.7% Minnesota 6.7% Georgia 6.6% Idaho 6.5% South Dakota 5.5% Wisconsin 5.5% Hawaii 5.4% District of Columbia 5.2% Utah 4.8% Kansas 4.4% Nebraska 4.0% Virginia 4.0% North Dakota 3.2% Wyoming 2.4% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; the U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, accessed December 2016; and U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, accessed December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 9 Another potential state response to decreased federal Figure 12 Medicaid funds is to shift state dollars from other Median Decrease in K-12 Education Spending Per Pupil spending, such as education spending. This analysis Repeal Enhanced assesses the percentage cut in state spending for K-12 ACA Match Repeal + 10% Cut Repeal + 20% Cut education per pupil that would be required if state -5.5% governments were to reduce spending on education -10.9% -9.4% (essentially school aid) to offset Medicaid cuts. Median -15.4% -13.7% state funding for education per pupil was $5,961 in -24.1% 2015. The analysis shows that states could experience State Aid for K-12 Total K-12 Spending median decreases in per pupil state funding for K-12 of 2015 Median K-12 Spending Per Pupil 10.9% to 24.1% to offset federal Medicaid reductions State Aid for K-12: $5,961 Total K-12 Spending: $10,961 under the three scenarios (Figure 12). SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction; and National Center on Education Statistics, Digest of Education Statistics, K-12 Enrollment - Total Students, All Grades (Excludes AE) [Public School]. Total spending for education is primarily from state and local governments, with a small share financed by the federal government. Reductions in state government spending for K-12 education would have a direct impact on total spending per-pupil. Median total spending per pupil was $10,961 in 2015. For total spending on K-12 education per pupil, states could face reductions in spending of 5.4% to 13.7% (Figure 12). Reductions would vary significantly across states. All of the scenarios would result in larger decreases in total K-12 per pupil spending for expansion states compared to non-expansion states (across states with Republican and Democratic governors). Mid- to high poverty states, could experience the largest reductions in per pupil spending to offset federal reductions in Medicaid. Figures 13 and 14 show estimated reductions in total spending for education to fill gaps in federal Medicaid funding. For median results by group for each scenario, see Table 4. For state-by-state results of changes in K-12 education spending per pupil, see Figure 15 and Appendix Table 5. Figure 13 Figure 14 Median Decrease in K-12 Spending Per Pupil, by Expansion Median Decrease in K-12 Spending Per Pupil, by Poverty Status and Political Party of Governor Quartile Repeal Enhanced Repeal Enhanced ACA Match Repeal + 10% Cut Repeal + 20% Cut ACA Match Repeal + 10% Cut Repeal + 20% Cut N/A N/A -5.1% -4.8% -5.1% -5.1% -5.6% -5.4% -6.8% -6.3% -7.4% -9.5% -9.5% -10.0% -10.2% -10.2% -10.9% -11.0% -11.8% -14.6% -13.9% -13.7% -16.5% -17.4% Dem/Ind Expansion Rep. Expansion Dem./Ind. Non-Expansion Rep. Non-Expansion Low poverty Mid-low poverty Mid-upper poverty High poverty 2015 Median K-12 Spending Per Pupil Dem/Ind Expansion: $12,173 Rep Expansion: $11,262 2015 Median K-12 Spending Per Pupil Dem/Ind Non-Expansion: $9,622 Rep Non-Expansion: $9,077 Low poverty: $15,080 Mid-low poverty: $11,117 Mid-upper poverty: $9,441 High poverty: $9,418 SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction; and National Center on Education Statistics, 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction; and National Center on Education Statistics, Digest of Education Statistics, K-12 Enrollment - Total Students, All Grades (Excludes AE) [Public School]. Digest of Education Statistics, K-12 Enrollment - Total Students, All Grades (Excludes AE) [Public School]. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 10 Table 4. Median Decrease in Spending for K-12 Education per Pupil by State Characteristics, 2015 Repeal Enhanced ACA Repeal + 10% Cut Repeal + 20% Cut State Aid for Total K-12 Decrease in Decrease in Decrease in Decrease in Decrease in Decrease in K-12 per Spending State Aid for Total K-12 State Aid for Total K-12 State Aid for Total K-12 pupil, Per Pupil, K-12 Per Spending Per K-12 Per Spending Per K-12 Per Spending Per 2015 2015 Pupil Pupil Pupil Pupil Pupil Pupil All States $5,961 $10,961 -10.9% -5.5% -15.4% -9.4% -24.1% -13.7% By Expansion Status Expansion $6,987 $11,510 -10.9% -5.5% -19.4% -10.5% -27.0% -15.5% Non-expansion $4,555 $9,077 N/A N/A -9.4% -5.1% -18.8% -10.2% By Political Party of the Governor Democratic $6,948 $11,475 -12.0% -7.1% -19.1% -11.7% -26.5% -16.4% Republican $5,476 $9,968 -10.6% -5.1% -13.8% -6.7% -22.0% -12.5% Independent $14,650 $19,132 -4.8% -3.7% -9.6% -7.4% -14.4% -11.0% By Region Northeast $7,026 $16,159 -11.6% -5.2% -19.1% -9.5% -30.7% -14.1% South $5,309 $9,406 -10.1% -5.4% -13.2% -6.7% -23.3% -13.3% Midwest $6,380 $11,243 -8.4% -4.9% -13.9% -7.9% -21.0% -13.0% West $6,127 $9,842 -12.4% -7.4% -20.2% -10.3% -27.6% -14.5% By Poverty Quartile Low Poverty $8,209 $15,080 -10.5% -5.6% -11.5% -7.4% -15.8% -11.0% Low-Mid Poverty $6,079 $11,117 -12.0% -5.1% -18.4% -9.5% -25.5% -13.9% Mid-Upper Poverty $5,961 $9,441 -14.7% -6.3% -14.5% -10.0% -26.7% -13.7% High Poverty $5,429 $9,418 -10.1% -5.4% -16.9% -10.9% -28.1% -17.4% By Expansion Status and Political Party of the Governor Expansion - Dem/Ind $7,467 $12,173 -12.0% -6.8% -19.7% -11.8% -27.0% -16.5% Expansion - Rep $6,879 $11,262 -10.6% -5.1% -19.2% -10.2% -27.8% -14.6% Non-expansion - Dem/Ind $4,952 $9,622 N/A N/A -8.6% -4.8% -17.3% -9.5% Non-expansion - Rep $4,535 $9,077 N/A N/A -9.4% -5.1% -18.8% -10.2% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction; and National Center on Education Statistics, Digest of Education Statistics, K-12 Enrollment - Total Students, All Grades (Excludes AE) [Public School]. Figure 15 Decrease in Total K-12 Spending Per Pupil Under Repeal of the ACA Enhanced Match + 20% Cut Oregon 25.0% New Mexico 24.7% Kentucky 23.3% California 22.5% District of Columbia 22.2% Arizona 20.3% Mississippi 18.9% Washington 18.3% Rhode Island 18.2% Arkansas 17.5% Louisiana 17.3% West Virginia 17.2% Minnesota 16.5% New York 16.4% Delaware 16.0% Ohio 15.9% Indiana 15.9% Michigan 15.2% Hawaii 15.1% Vermont 15.1% Montana Massachusetts 14.5% Expansion State 14.2% Pennsylvania 14.1% Colorado 14.1% North Dakota 13.9% Non-Expansion State Nevada 13.7% Tennessee 13.5% Missouri 13.5% Idaho 13.3% North Carolina Maine 13.3% 13.2% US Median in 2015: 13.7% Iowa 12.5% Maryland 12.0% South Carolina 11.8% Connecticut 11.5% Oklahoma 11.5% Alaska 11.0% Alabama 11.0% Florida 10.2% Illinois 9.7% Wisconsin 9.5% New Hampshire 9.4% Texas 9.1% New Jersey 9.0% Georgia 8.2% South Dakota 7.7% Utah 7.7% Kansas 6.7% Virginia 5.8% Nebraska 5.3% Wyoming 3.7% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction; and National Center on Education Statistics, Digest of Education Statistics, K-12 Enrollment - Total Students, All Grades (Excludes AE) [Public School]. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 11 The Congress is currently debating the American Health Care Act (AHCA), which would not only repeal and replace the Affordable Care Act (ACA) but also make far reaching changes to the structure and financing of Medicaid. The AHCA would use a per capita cap policy or block grants to cap federal funds to states for Medicaid. These reductions in federal Medicaid funding, could have implications for other areas of the state budget if states chose to offset the decreases in federal spending with state funds by raising taxes or reducing other state spending (like K-12 education). States could also reduce spending in Medicaid by finding savings but more likely by restricting eligibility or benefits. This analysis found that under various scenarios of reductions in federal Medicaid funding in FFY 2015, states would have to increase their per resident state Medicaid spending by a median of 17.2% to 40.3% to maintain total Medicaid spending. To pay for these increases, states could increase total state tax revenue per resident by a median of 3.5% to 8.1% or decrease K-12 education funding per pupil by a median of 10.9% to 24.1%. Because states have different starting points for taxes and education spending, the effects could vary by state and by groups of states. However, due to assumptions about changes in the ACA enhanced match rate, states that have adopted the Medicaid expansion will experience larger implications from the federal Medicaid funding reductions; this is true across states with Republican and Democratic governors. This increased budget pressure could make it difficult for states to maintain the Medicaid expansion. Federal funding reductions could have a disproportionate effect on states that spend less per resident on Medicaid and education, and have lower tax revenues, typically high poverty states. The responses presented in the report are illustrative. In reality, each state would make different policy choices and states could implement a combination of approaches, or not completely offset the federal reductions. However, the results show that depending on the size of the gap to fill, the responses could be significant. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 12 The following details the methods and data used to examine the outcomes for reductions in federal Medicaid spending.  Estimated Reductions in federal Medicaid spending. FY 2015 spending for each state was obtained from the Medicaid Budget and Expenditure System (MBES). Adjustments were made for states that expanded mid-year in FY 2015 or in FY 2016. Since Indiana and Pennsylvania expanded early in FY 2015, spending for the expansion population was adjusted to represent a full year of spending. Enrollment data for Alaska (as of April 2017), Louisiana (as of February 2017), and Montana (as of October 2016) were obtained from state resources. The latest enrollment data for these three states were multiplied by the federal per enrollee spending across all Medicaid enrollees in the state to estimate spending for the expansion population. Using the adjusted FY 2015 spending for the expansion group, we assumed a 90% match rate (the rate when the ACA is in full effect) and then took the difference between that match rate and spending assuming a state’s traditional match rate. For the other effects, we estimated a 10% and a 20% reduction in federal funding off of FY 2015 spending for the traditional Medicaid population. We did not estimate the specifics of per capita cap or block grant proposals. (KFF analysis of Centers for Medicare and Medicaid Services, Expenditure Reports from MBES, https://www.medicaid.gov/medicaid/financing-and-reimbursement/state-expenditure- reporting/expenditure-reports/index.html; Centers for Medicare and Medicaid Services, Quarterly Medicaid Enrollment Report, https://www.medicaid.gov/medicaid/program-information/medicaid-and- chip-enrollment-data/enrollment-mbes/index.html; Alaska Department of Health and Social Services, Medicaid in Alaska Dashboard, accessed May 23, 2017, http://dhss.alaska.gov/HealthyAlaska/Pages/dashboard.aspx; Louisiana Department of Health, Medicaid Dashboard, accessed March 3, 2017, http://ldh.la.gov/healthyladashboard/; Montana Department of Public Health and Human Services, Monthly enrollments, accessed March 3, 2017, http://dphhs.mt.gov/StatisticalInformation.)  Change in Medicaid spending per state resident: Medicaid cut divided by state population as of July 1, 2015. (U.S. Bureau of the Census, State Population Totals Tables: 2010-2016, https://www2.census.gov/programs-surveys/popest/tables/2010-2016/state/totals/nst-est2016-01.xlsx.)  Change in state government taxes: The percentage increase in state government taxes that would be required if states were to raise taxes to offset Medicaid cuts. The calculation is the Medicaid cut as a percentage of state taxes, based upon state fiscal year 2015 state government tax collections. For the District of Columbia, which does not have a state government, we used District tax collections. (U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, https://www.census.gov/govs/statetax/.)  Change in largest state government tax: The percentage increase that would be required in a state’s largest state-government tax, if the state raised that tax to offset Medicaid cuts. The calculation is the Medicaid cut as a percentage of the state’s largest tax, where the largest tax is determined based upon detailed item-code data for state fiscal year 2015. For the District of Columbia, which does not have a state government, we used the largest District tax. (U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, https://www.census.gov/govs/statetax/.) Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 13  Change in state aid for K-12 education: The percentage cut in state aid for K-12 education that would be required if states were to cut this aid to offset Medicaid cuts. The calculation is the Medicaid cut as a percentage of state aid for K-12 education. Revenue of public schools from state governments is used as a proxy for state aid because data that explicitly measure state aid and that are both timely and comparable across states are not available. (Revenue from the state government may differ from what states show in their budgets for state aid. For example, Hawaii operates all of its schools, rather than providing aid to school districts. This approach treats revenue from the state of Hawaii as state aid.) For the District of Columbia, which does not have a state government, we used District revenue used to support schools. The latest available data for revenue of public schools is for 2014, from the National Center for Education Statistics NCES. (NCES, Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction, https://nces.ed.gov/programs/digest/d16/tables/dt16_235.20.asp.) We estimated values for 2015 by adding one year of estimated growth to each state’s value for 2014, based on the compound annual growth rate for the prior five years (2009 to 2014).  Change in K-12 education per-pupil spending: The cut that would be required in K-12 education spending per pupil if the entire Medicaid cut were offset by cuts in spending by school districts. The per- pupil cut is calculated as the Medicaid cut divided by the number of public school pupils in the state in the 2014-15 school year, excluding adult education enrollment. (National Center on Education Statistics, Digest of Education Statistics, K-12 Enrollment - Total Students, All Grades (Excludes AE) [Public School], http://nces.ed.gov/ccd/elsi.) To provide context for these numbers, we then compute this cut as a percentage of total public school expenditures per pupil (excluding adult education enrollment). The latest available data for revenue of public schools is for 2014, from the National Center for Education Statistics NCES. We estimated values for 2015 by adding one year of estimated growth to each state’s value for 2014, based on the compound annual growth rate for the prior five years (2009 to 2014).  Medicaid expansion status: ACA Medicaid expansion status, as of January 2017. http://kff.org/health- reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care- act/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D  Political party: Political party of the state governor or mayor, as of January 25, 2017 (in the case of the District of Columbia). https://www.nga.org/files/live/sites/NGA/files/pdf/GOVLIST.PDF  Region: Major geographic divisions of the United States as defined by the Bureau of the Census http://www2.census.gov/geo/docs/maps-data/maps/reg_div.txt  Poverty quartile: The poverty-rate quartile that each state is based upon the 2013-2015 three-year- average CPS poverty-rate. (U.S. Bureau of the Census, Historical Poverty Tables: People and Families - 1959 to 2015, Table 19. Percent of Persons in Poverty, by State, https://www2.census.gov/programs- surveys/cps/tables/time-series/historical-poverty-people/hstpov19.xls.) Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 14 STATE TABLES Appendix Table 1. State Characteristics, as of January 2017 State Expansion Status Governor's Party Region Poverty Quartile California Expansion Democratic West Mid‐Upper Poverty Colorado Expansion Democratic West Low‐Mid Poverty Connecticut Expansion Democratic Northeast Low Poverty Delaware Expansion Democratic South Low‐Mid Poverty District of Columbia Expansion Democratic South High Poverty Hawaii Expansion Democratic West Low Poverty Louisiana Expansion Democratic South High Poverty Minnesota Expansion Democratic Midwest Low Poverty Montana Expansion Democratic West Low‐Mid Poverty New York Expansion Democratic Northeast Mid‐Upper Poverty Oregon Expansion Democratic West Mid‐Upper Poverty Pennsylvania Expansion Democratic Northeast Low‐Mid Poverty Rhode Island Expansion Democratic Northeast Low Poverty Washington Expansion Democratic West Low‐Mid Poverty West Virginia Expansion Democratic South High Poverty Alaska Expansion Independent West Low Poverty Arizona Expansion Republican West High Poverty Arkansas Expansion Republican South High Poverty Illinois Expansion Republican Midwest Low‐Mid Poverty Indiana Expansion Republican Midwest Mid‐Upper Poverty Iowa Expansion Republican Midwest Low‐Mid Poverty Kentucky Expansion Republican South High Poverty Maryland Expansion Republican South Low Poverty Massachusetts Expansion Republican Northeast Low‐Mid Poverty Michigan Expansion Republican Midwest Mid‐Upper Poverty Nevada Expansion Republican West Mid‐Upper Poverty New Hampshire Expansion Republican Northeast Low Poverty New Jersey Expansion Republican Northeast Low Poverty New Mexico Expansion Republican West High Poverty North Dakota Expansion Republican Midwest Low‐Mid Poverty Ohio Expansion Republican Midwest Mid‐Upper Poverty Vermont Expansion Republican Northeast Low Poverty North Carolina Non‐expansion Democratic South Mid‐Upper Poverty Virginia Non‐expansion Democratic South Low Poverty Alabama Non‐expansion Republican South High Poverty Florida Non‐expansion Republican South Mid‐Upper Poverty Georgia Non‐expansion Republican South High Poverty Idaho Non‐expansion Republican West Low‐Mid Poverty Kansas Non‐expansion Republican Midwest Low‐Mid Poverty Maine Non‐expansion Republican Northeast Mid‐Upper Poverty Mississippi Non‐expansion Republican South High Poverty Missouri Non‐expansion Republican Midwest Low‐Mid Poverty Nebraska Non‐expansion Republican Midwest Low Poverty Oklahoma Non‐expansion Republican South High Poverty South Carolina Non‐expansion Republican South High Poverty South Dakota Non‐expansion Republican Midwest Mid‐Upper Poverty Tennessee Non‐expansion Republican South Mid‐Upper Poverty Texas Non‐expansion Republican South Mid‐Upper Poverty Utah Non‐expansion Republican West Low Poverty Wisconsin Non‐expansion Republican Midwest Low‐Mid Poverty Wyoming Non‐expansion Republican West Low Poverty SOURCES: Kaiser Family Foundation's State health Facts, Status of State Action on the Medicaid  Expansion Decision, as of January 1, 2017. National Governors Association, Governors Roster 2017, as  of January 25, 2017. U.S. Census Bureau, Regions and Divisions with State FIPS Codes, 2017. U.S.  Bureau of the Census, Historical Poverty Tables: People and Families ‐ 1959 to 2015, Table 19. Percent  of Persons in Poverty, by State.    Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 15 Appendix Table 2. Federal Medicaid Cuts by State, FFY 2015 Repeal Enhanced ACA  Repeal + 10% Cut Repeal + 20% Cut Match United States $26,676,000,000 $52,805,000,000 $78,933,000,000 Alabama N/A $372,000,000 $745,000,000 Alaska $93,000,000 $185,000,000 $277,000,000 Arizona $496,000,000 $1,073,000,000 $1,650,000,000 Arkansas $264,000,000 $561,000,000 $858,000,000 California $7,590,000,000 $10,700,000,000 $13,810,000,000 Colorado $527,000,000 $833,000,000 $1,139,000,000 Connecticut $542,000,000 $866,000,000 $1,191,000,000 Delaware $148,000,000 $225,000,000 $302,000,000 District of Columbia $69,000,000 $219,000,000 $369,000,000 Florida N/A $1,254,000,000 $2,509,000,000 Georgia N/A $652,000,000 $1,304,000,000 Hawaii $195,000,000 $274,000,000 $352,000,000 Idaho N/A $130,000,000 $259,000,000 Illinois $1,282,000,000 $2,007,000,000 $2,733,000,000 Indiana $482,000,000 $1,026,000,000 $1,569,000,000 Iowa $258,000,000 $472,000,000 $687,000,000 Kansas N/A $173,000,000 $347,000,000 Kentucky $597,000,000 $1,052,000,000 $1,506,000,000 Louisiana $383,000,000 $869,000,000 $1,354,000,000 Maine N/A $162,000,000 $325,000,000 Maryland $703,000,000 $1,100,000,000 $1,496,000,000 Massachusetts $744,000,000 $1,469,000,000 $2,194,000,000 Michigan $797,000,000 $1,640,000,000 $2,484,000,000 Minnesota $698,000,000 $1,162,000,000 $1,627,000,000 Mississippi N/A $386,000,000 $772,000,000 Missouri N/A $619,000,000 $1,237,000,000 Montana $78,000,000 $155,000,000 $233,000,000 Nebraska N/A $101,000,000 $202,000,000 Nevada $235,000,000 $375,000,000 $515,000,000 New Hampshire $114,000,000 $187,000,000 $259,000,000 New Jersey $1,179,000,000 $1,769,000,000 $2,358,000,000 New Mexico $281,000,000 $534,000,000 $787,000,000 New York $4,250,000,000 $6,769,000,000 $9,289,000,000 North Carolina N/A $843,000,000 $1,687,000,000 North Dakota $97,000,000 $141,000,000 $185,000,000 Ohio $967,000,000 $2,060,000,000 $3,154,000,000 Oklahoma N/A $317,000,000 $634,000,000 Oregon $691,000,000 $1,055,000,000 $1,419,000,000 Pennsylvania $1,258,000,000 $2,382,000,000 $3,505,000,000 Rhode Island $184,000,000 $292,000,000 $399,000,000 South Carolina N/A $430,000,000 $860,000,000 South Dakota N/A $46,000,000 $93,000,000 Tennessee N/A $592,000,000 $1,184,000,000 Texas N/A $2,051,000,000 $4,102,000,000 Utah N/A $161,000,000 $322,000,000 Vermont $93,000,000 $170,000,000 $248,000,000 Virginia N/A $406,000,000 $813,000,000 Washington $1,250,000,000 $1,642,000,000 $2,035,000,000 West Virginia $133,000,000 $345,000,000 $557,000,000 Wisconsin N/A $471,000,000 $942,000,000 Wyoming N/A $28,000,000 $56,000,000 NOTE: Adjustments were made for the five states that expanded mid‐year in FY15 or in FY16 (AK, IN,  LA, MT, PA). Data are rounded to the nearest million and may not sum to the US total.  SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and  Expenditure System (MBES), CMS, accessed December 2016.  Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 16 Appendix Table 3. Increase in State Medicaid Spending per Resident by State, 2015 Repeal Enhanced  State Medicaid  Repeal + 10% Cut Repeal + 20% Cut ACA Match Spending Per  Increase in State  Increase in State  Increase in State  Resident,  Medicaid  Medicaid  Medicaid  FFY 2015 Spending per  Spending per  Spending per  United States $619 13.4% 26.6% 39.8% Alabama $336 N/A 22.8% 45.7% Alaska $889 14.2% 28.2% 42.2% Arizona $392 18.5% 40.1% 61.7% Arkansas $445 19.9% 42.4% 64.8% California $809 24.0% 33.9% 43.8% Colorado $559 17.3% 27.4% 37.4% Connecticut $917 16.5% 26.3% 36.2% Delaware $751 20.8% 31.7% 42.6% District of Columbia $1,015 10.1% 32.2% 54.3% Florida $407 N/A 15.2% 30.5% Georgia $306 N/A 20.9% 41.8% Hawaii $534 25.6% 36.0% 46.3% Idaho $306 N/A 25.6% 51.2% Illinois $558 17.9% 28.0% 38.2% Indiana $462 15.8% 33.6% 51.4% Iowa $551 15.0% 27.5% 39.9% Kansas $450 N/A 13.3% 26.5% Kentucky $499 27.0% 47.6% 68.2% Louisiana $656 12.5% 28.3% 44.2% Maine $732 N/A 16.7% 33.4% Maryland $674 17.4% 27.2% 37.0% Massachusetts $1,061 10.3% 20.4% 30.5% Michigan $472 17.0% 35.1% 53.1% Minnesota $865 14.7% 24.5% 34.3% Mississippi $450 N/A 28.7% 57.4% Missouri $571 N/A 17.8% 35.6% Montana $392 19.2% 38.4% 57.7% Nebraska $461 N/A 11.6% 23.2% Nevada $291 28.0% 44.6% 61.2% New Hampshire $556 15.4% 25.2% 35.0% New Jersey $655 20.1% 30.2% 40.3% New Mexico $568 23.8% 45.2% 66.6% New York $1,259 17.1% 27.2% 37.4% North Carolina $429 N/A 19.6% 39.2% North Dakota $592 21.7% 31.5% 41.3% Ohio $572 14.6% 31.0% 47.5% Oklahoma $466 N/A 17.4% 34.8% Oregon $529 32.5% 49.6% 66.7% Pennsylvania $825 11.9% 22.6% 33.2% Rhode Island $1,048 16.6% 26.4% 36.1% South Carolina $358 N/A 24.6% 49.2% South Dakota $423 N/A 12.8% 25.6% Tennessee $478 N/A 18.8% 37.6% Texas $524 N/A 14.3% 28.5% Utah $221 N/A 24.4% 48.8% Vermont $999 14.8% 27.2% 39.6% Virginia $474 N/A 10.2% 20.5% Washington $569 30.7% 40.3% 50.0% West Virginia $498 14.5% 37.6% 60.7% Wisconsin $570 N/A 14.3% 28.6% Wyoming $456 N/A 10.4% 20.9% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget  and Expenditure System (MBES), CMS, accessed December 2016 and the U.S. Bureau of the  Census, State Population Totals Tables: 2010‐2016, accessed December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 17 Appendix Table 4. Increase in State Taxes per Resident by State, 2015 Repeal Enhanced ACA Match Repeal + 10% Cut Repeal + 20% Cut  Total State  Revenue from  Increase in  Increase in the  Increase in  Increase in the  Increase in  Increase in the  Tax Revenue  Largest tax, the Largest Tax  Total State  Largest State  Total State  Largest State  Total State  Largest State  per Resident,  2015 per Resident,  Taxes per  Tax per  Taxes per  Tax per  Taxes per  Tax per  2015 2015 Resident  Resident Resident  Resident Resident  Resident United States $2,840 Individual Income  $1,050 2.9% 7.9% 5.8% 15.7% 8.7% 23.5% Alabama $2,010 Individual Income  $687 N/A N/A 3.8% 11.2% 7.6% 22.3% Alaska $1,171 Corporation Net Income  $309 10.8% 40.9% 21.4% 81.2% 32.1% 121.6% Arizona $2,066 General Sales and Gross Receipts  $948 3.5% 7.7% 7.6% 16.6% 11.7% 25.5% Arkansas $3,086 General Sales and Gross Receipts  $1,069 2.9% 8.3% 6.1% 17.6% 9.3% 27.0% California $3,877 Individual Income  $1,999 5.0% 9.7% 7.1% 13.7% 9.1% 17.7% Colorado $2,351 Individual Income  $1,170 4.1% 8.3% 6.5% 13.1% 8.9% 17.9% Connecticut $4,528 Individual Income  $2,282 3.3% 6.6% 5.3% 10.6% 7.3% 14.6% Delaware $3,722 Corporations in General License $1,278 4.2% 12.2% 6.4% 18.6% 8.6% 25.0% District of Columbia $10,572 Property  $3,359 1.0% 3.0% 3.1% 9.7% 5.2% 16.4% Florida $1,838 General Sales and Gross Receipts  $1,077 N/A N/A 3.4% 5.8% 6.7% 11.5% Georgia $1,934 Individual Income  $949 N/A N/A 3.3% 6.7% 6.6% 13.5% Hawaii $4,551 General Sales and Gross Receipts  $2,100 3.0% 6.5% 4.2% 9.1% 5.4% 11.8% Idaho $2,405 Individual Income  $894 N/A N/A 3.3% 8.8% 6.5% 17.5% Illinois $3,060 Individual Income  $1,239 3.3% 8.1% 5.1% 12.6% 7.0% 17.2% Indiana $2,631 General Sales and Gross Receipts  $1,101 2.8% 6.6% 5.9% 14.1% 9.0% 21.6% Iowa $2,943 Individual Income  $1,112 2.8% 7.4% 5.1% 13.6% 7.5% 19.8% Kansas $2,712 General Sales and Gross Receipts  $1,050 N/A N/A 2.2% 5.7% 4.4% 11.4% Kentucky $2,621 Individual Income  $920 5.1% 14.7% 9.1% 25.8% 13.0% 37.0% Louisiana $2,082 Individual Income  $639 3.9% 12.8% 8.9% 29.1% 13.9% 45.4% Maine $3,057 Individual Income  $1,153 N/A N/A 4.0% 10.6% 8.0% 21.2% Maryland $3,311 Individual Income  $1,392 3.5% 8.4% 5.5% 13.2% 7.5% 17.9% Massachusetts $3,982 Individual Income  $2,136 2.8% 5.1% 5.4% 10.1% 8.1% 15.1% Michigan $2,718 General Sales and Gross Receipts  $929 3.0% 8.6% 6.1% 17.8% 9.2% 27.0% Minnesota $4,458 Individual Income  $1,892 2.9% 6.7% 4.8% 11.2% 6.7% 15.7% Mississippi $2,645 General Sales and Gross Receipts  $1,145 N/A N/A 4.9% 11.3% 9.8% 22.6% Missouri $1,968 Individual Income  $964 N/A N/A 5.2% 10.6% 10.3% 21.1% Montana $2,755 Individual Income  $1,144 2.7% 6.6% 5.5% 13.2% 8.2% 19.8% Nebraska $2,686 Individual Income  $1,183 N/A N/A 2.0% 4.5% 4.0% 9.0% Nevada $2,612 General Sales and Gross Receipts  $1,415 3.1% 5.8% 5.0% 9.2% 6.8% 12.6% New Hampshire $1,870 Corporation Net Income  $434 4.6% 19.7% 7.5% 32.4% 10.4% 45.0% New Jersey $3,533 Individual Income  $1,483 3.7% 8.9% 5.6% 13.3% 7.5% 17.8% New Mexico $2,889 General Sales and Gross Receipts  $1,084 4.7% 12.5% 8.9% 23.7% 13.1% 34.9% New York $3,962 Individual Income  $2,214 5.4% 9.7% 8.7% 15.5% 11.9% 21.2% North Carolina $2,497 Individual Income  $1,116 N/A N/A 3.4% 7.5% 6.7% 15.1% North Dakota $7,584 Severance  $3,765 1.7% 3.4% 2.5% 5.0% 3.2% 6.5% Ohio $2,438 General Sales and Gross Receipts  $1,025 3.4% 8.1% 7.3% 17.3% 11.1% 26.5% Oklahoma $2,408 Individual Income  $832 N/A N/A 3.4% 9.7% 6.7% 19.5% Oregon $2,628 Individual Income  $1,816 6.5% 9.5% 10.0% 14.4% 13.4% 19.4% Pennsylvania $2,823 Individual Income  $898 3.5% 11.0% 6.6% 20.7% 9.7% 30.5% Rhode Island $3,028 Individual Income  $1,151 5.8% 15.1% 9.1% 24.0% 12.5% 32.8% South Carolina $1,968 Individual Income  $764 N/A N/A 4.5% 11.5% 8.9% 23.0% South Dakota $1,951 General Sales and Gross Receipts  $1,132 N/A N/A 2.8% 4.8% 5.5% 9.6% Tennessee $1,925 General Sales and Gross Receipts  $993 N/A N/A 4.7% 9.0% 9.3% 18.1% Texas $2,008 General Sales and Gross Receipts  $1,227 N/A N/A 3.7% 6.1% 7.4% 12.2% Utah $2,241 Individual Income  $1,056 N/A N/A 2.4% 5.1% 4.8% 10.2% Vermont $4,861 Property  $1,654 3.1% 9.0% 5.6% 16.4% 8.1% 23.9% Virginia $2,454 Individual Income  $1,423 N/A N/A 2.0% 3.4% 4.0% 6.8% Washington $2,883 General Sales and Gross Receipts  $1,748 6.1% 10.0% 8.0% 13.1% 9.9% 16.3% West Virginia $3,023 Individual Income  $1,050 2.4% 6.9% 6.2% 17.8% 10.0% 28.8% Wisconsin $2,951 Individual Income  $1,226 N/A N/A 2.8% 6.7% 5.5% 13.3% Wyoming $4,017 Severance  $1,507 N/A N/A 1.2% 3.2% 2.4% 6.3% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES), CMS, accessed December 2016; the U.S. Bureau of the  Census, State Population Totals Tables: 2010‐2016, accessed December 2016; and U.S. Bureau of the Census, 2015 Annual Survey of State Government Tax Collections, accessed  December 2016. Implications of Reduced Federal Medicaid Funds: How Could States Fill the Funding Gap? 18 Appendix Table 5. Decrease in Spending for K‐12 Education per Pupil by State, 2015 Repeal Enhanced ACA  Repeal + 10% Cut  Repeal + 20% Cut State Aid  Total K‐12  Decrease in  Decrease in  Decrease in  Decrease in  Decrease in  Decrease in  for K‐12 per  Spending  State Aid  Total K‐12  State Aid  Total K‐12  State Aid  Total K‐12  Pupil,  Per Pupil,  for K‐12 Per  Spending  for K‐12 Per  Spending  for K‐12 Per  Spending  2015  2015 Pupil Per Pupil Pupil Per Pupil Pupil Per Pupil United States $5,867 $11,233 ‐9.2% ‐4.8% ‐18.2% ‐9.4% ‐27.1% ‐14.1% Alabama $5,437 $9,077 N/A N/A ‐9.2% ‐5.5% ‐18.4% ‐11.0% Alaska $14,650 $19,132 ‐4.8% ‐3.7% ‐9.6% ‐7.4% ‐14.4% ‐11.0% Arizona $3,730 $7,320 ‐12.0% ‐6.1% ‐25.9% ‐13.2% ‐39.9% ‐20.3% Arkansas $5,422 $9,968 ‐9.9% ‐5.4% ‐21.1% ‐11.5% ‐32.2% ‐17.5% California $6,273 $9,842 ‐19.4% ‐12.4% ‐27.4% ‐17.5% ‐35.4% ‐22.5% Colorado $4,617 $9,090 ‐12.8% ‐6.5% ‐20.3% ‐10.3% ‐27.8% ‐14.1% Connecticut $8,374 $19,061 ‐11.9% ‐5.2% ‐19.1% ‐8.4% ‐26.2% ‐11.5% Delaware $8,850 $14,066 ‐12.5% ‐7.8% ‐19.0% ‐11.9% ‐25.5% ‐16.0% District of Columbia $25,660 $20,563 ‐6.0% ‐4.1% ‐13.2% ‐13.2% ‐20.5% ‐22.2% Florida $3,906 $8,914 N/A N/A ‐11.6% ‐5.1% ‐23.3% ‐10.2% Georgia $4,555 $9,121 N/A N/A ‐8.2% ‐4.1% ‐16.4% ‐8.2% Hawaii $13,081 $12,804 ‐8.2% ‐8.3% ‐11.5% ‐11.7% ‐14.8% ‐15.1% Idaho $4,732 $6,698 N/A N/A ‐9.4% ‐6.7% ‐18.8% ‐13.3% Illinois $3,449 $13,773 ‐18.2% ‐4.6% ‐28.5% ‐7.1% ‐38.8% ‐9.7% Indiana $6,881 $9,441 ‐6.7% ‐4.9% ‐14.3% ‐10.4% ‐21.8% ‐15.9% Iowa $6,876 $11,047 ‐7.6% ‐4.7% ‐13.8% ‐8.6% ‐20.1% ‐12.5% Kansas $6,710 $10,473 N/A N/A ‐5.3% ‐3.4% ‐10.5% ‐6.7% Kentucky $5,665 $9,406 ‐15.3% ‐9.2% ‐27.0% ‐16.2% ‐38.6% ‐23.3% Louisiana $5,309 $10,901 ‐10.1% ‐4.9% ‐22.8% ‐11.1% ‐35.6% ‐17.3% Maine $5,961 $13,874 N/A N/A ‐15.4% ‐6.6% ‐30.7% ‐13.2% Maryland $7,085 $14,253 ‐11.4% ‐5.6% ‐17.7% ‐8.8% ‐24.1% ‐12.0% Massachusetts $7,026 $16,159 ‐11.1% ‐4.8% ‐21.9% ‐9.5% ‐32.7% ‐14.2% Michigan $7,557 $10,961 ‐7.1% ‐4.9% ‐14.5% ‐10.0% ‐22.0% ‐15.2% Minnesota $9,741 $11,475 ‐8.4% ‐7.1% ‐13.9% ‐11.8% ‐19.5% ‐16.5% Mississippi $4,535 $8,336 N/A N/A ‐17.3% ‐9.4% ‐34.7% ‐18.9% Missouri $3,705 $10,006 N/A N/A ‐18.2% ‐6.7% ‐36.4% ‐13.5% Montana $5,845 $11,117 ‐9.2% ‐4.8% ‐18.4% ‐9.7% ‐27.6% ‐14.5% Nebraska $4,151 $12,116 N/A N/A ‐7.8% ‐2.7% ‐15.6% ‐5.3% Nevada $3,492 $8,201 ‐14.7% ‐6.3% ‐23.4% ‐10.0% ‐32.1% ‐13.7% New Hampshire $5,476 $15,080 ‐11.3% ‐4.1% ‐18.6% ‐6.7% ‐25.8% ‐9.4% New Jersey $8,209 $19,151 ‐10.5% ‐4.5% ‐15.7% ‐6.7% ‐21.0% ‐9.0% New Mexico $7,801 $9,430 ‐10.7% ‐8.8% ‐20.2% ‐16.7% ‐29.8% ‐24.7% New York $9,134 $20,760 ‐17.1% ‐7.5% ‐27.2% ‐12.0% ‐37.4% ‐16.4% North Carolina $5,279 $8,273 N/A N/A ‐10.4% ‐6.6% ‐20.8% ‐13.3% North Dakota $9,765 $12,476 ‐9.4% ‐7.3% ‐13.6% ‐10.6% ‐17.8% ‐13.9% Ohio $6,051 $11,477 ‐9.3% ‐4.9% ‐19.8% ‐10.4% ‐30.2% ‐15.9% Oklahoma $4,358 $8,029 N/A N/A ‐10.6% ‐5.7% ‐21.1% ‐11.5% Oregon $6,127 $10,068 ‐20.0% ‐12.2% ‐30.6% ‐18.6% ‐41.1% ‐25.0% Pennsylvania $6,079 $14,381 ‐12.0% ‐5.1% ‐22.7% ‐9.6% ‐33.5% ‐14.1% Rhode Island $6,948 $15,615 ‐18.9% ‐8.4% ‐29.9% ‐13.3% ‐40.9% ‐18.2% South Carolina $5,527 $9,618 N/A N/A ‐10.3% ‐5.9% ‐20.6% ‐11.8% South Dakota $3,170 $9,076 N/A N/A ‐11.0% ‐3.9% ‐22.1% ‐7.7% Tennessee $4,451 $8,824 N/A N/A ‐13.4% ‐6.7% ‐26.7% ‐13.5% Texas $4,315 $8,617 N/A N/A ‐9.1% ‐4.5% ‐18.2% ‐9.1% Utah $4,302 $6,595 N/A N/A ‐5.9% ‐3.8% ‐11.8% ‐7.7% Vermont $18,623 $19,454 ‐5.9% ‐5.7% ‐10.8% ‐10.4% ‐15.8% ‐15.1% Virginia $4,626 $10,971 N/A N/A ‐6.9% ‐2.9% ‐13.7% ‐5.8% Washington $7,431 $10,355 ‐15.7% ‐11.2% ‐20.6% ‐14.8% ‐25.5% ‐18.3% West Virginia $7,503 $11,543 ‐6.3% ‐4.1% ‐16.4% ‐10.7% ‐26.5% ‐17.2% Wisconsin $5,758 $11,439 N/A N/A ‐9.4% ‐4.7% ‐18.8% ‐9.5% Wyoming $10,303 $16,050 N/A N/A ‐2.9% ‐1.9% ‐5.8% ‐3.7% SOURCE: KFF/Rockefeller Institute of Government analysis of data from the Medicaid Budget and Expenditure System (MBES),  CMS, accessed December 2016; NCES, Revenues for public elementary and secondary schools, by source of funds and state or  jurisdiction; and National Center on Education Statistics, Digest of Education Statistics, K‐12 Enrollment ‐ Total Students, All  Grades (Excludes AE) [Public School]. The Henry J. Kaiser Family Foundation Headquarters: 2400 Sand Hill Road, Menlo Park, CA 94025 | Phone 650-854-9400 Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270 www.kff.org | Email Alerts: kff.org/email | facebook.com/KaiserFamilyFoundation | twitter.com/KaiserFamFound Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.