The Economic Impact of the Affordable Care Act on Arkansas

The Economic Impact of the Affordable Care Act on Arkansas

Carter C. Price
Evan Saltzman
Copyright Date: 2013
Published by: RAND Corporation
Pages: 20
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  • Book Info
    The Economic Impact of the Affordable Care Act on Arkansas
    Book Description:

    The Affordable Care Act (ACA) will increase coverage through the expansion of Medicaid and the creation of a Health Insurance Exchange with subsidies. RAND researchers analyzed the ACA’s economic impact on the state of Arkansas and found that by 2016, about 400,000 people will be newly insured, net federal payments to the state will amount to $430 million annually, and the total gross domestic product will see a net increase of $550 million.

    eISBN: 978-0-8330-8376-0
    Subjects: Health Sciences

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface and Summary
    (pp. iii-iii)
  3. Table of Contents
    (pp. iv-iv)
  4. Abbreviations
    (pp. v-v)
  5. Introduction
    (pp. 1-1)

    The Affordable Care Act (ACA) includes two provisions that will push billions of dollars into state economies: the expansion of Medicaid to cover the poorest segment of the population (those under 138 percent of the Federal Poverty Level) and subsidies for low- and medium- income people to buy health insurance (those between 100 percent and 400 percent of the Federal Poverty Level). As one of the poorest states in the union, Arkansas will disproportionately benefit from the expansion of Medicaid and the Exchange subsidies.

    These provisions are paid for by cuts to Medicare spending and new taxes. Additionally, while the...

  6. Methods
    (pp. 2-6)

    We used the RAND COMPARE microsimulation to model the coverage and spending impact of the ACA on Arkansas. We then applied the Regional Input-Output Modeling System (RIMS II) multipliers from the Bureau of Economic Analysis (BEA) to determine the broader economic effects of the changes in spending. We also calculated the mortality and tax implications of the ACA using relevant studies from the academic literature. All of these measures have been scaled to the county level to provide additional visibility to the local effects of the ACA.

    All of the analysis in this document is based in the year 2016....

  7. Results
    (pp. 7-8)

    A summary of the state-level enrollment results can be seen in Table 1, and the state-level economic change is listed below. In addition to the statewide analysis, we produced county-level estimates for each of Arkansas’s counties. These county-level statistics on insurance coverage can be found in Appendix 1 and the county level economic impact is in Appendix 2. All of the numbers presented in this section are from 2016 results unless otherwise specified. The COMPARE model estimates that the number of nonelderly people with health insurance will be nearly 2.3 million with the ACA, compared to 1.9 million without. The...

  8. Conclusions
    (pp. 9-9)

    CBO estimates that the ACA results in an increase in net revenue to the federal government, but because Arkansas is a relatively poor state, there will be a net flow of money into the state. Specifically, the increased federal spending on subsidies and Medicaid for the poor will outweigh the decreased Medicare spending and increases in taxes and fees. Only relatively poor states such as West Virginia and Mississippi can expect to see a favorable balance of transfer payments and an economic impact similar to that in Arkansas. Most other states will likely see an increase in the transfer payments...

  9. Appendix 1: Coverage by County
    (pp. 10-11)
  10. Appendix 2: Economic Impact by County
    (pp. 12-13)
  11. References
    (pp. 14-15)