Hilltop Estimates the Cost of Expanding
Medicaid in Mississippi

The 2010 Affordable Care Act (ACA) gave states the option to expand Medicaid eligibility to individuals with incomes up to 138% of the federal poverty level (FPL). To date, 38 states and the District of Columbia have chosen to expand Medicaid; Mississippi is 1 of the 12 states that have not chosen to do so. To provide more information for Mississippi policymakers in their deliberations on this issue, the Center for Mississippi Health Policy commissioned The Hilltop Institute to conduct a study to estimate the effects of a hypothetical Medicaid expansion on Mississippi’s Medicaid program, state costs, health services providers, and wider state economy.

The following are major findings of the study:

• Medicaid expansion in Mississippi would result in 192,065 to 214,716 additional Medicaid participants from 2023 through 2028.
• Without accounting for additional federal funds from the American Rescue Plan (ARP) Act, Medicaid expansion would be roughly cost-neutral for Mississippi. The state’s direct costs of the additional Medicaid participants would be offset by increased federal funding, increased tax revenue for state and local governments, cost offsets, and reductions in uncompensated care for state- and locally owned hospitals.
• The ARP Act would result in significant additional federal funding for the first two years of Medicaid expansion. Specifically, Hilltop estimates that this would result in an additional $338 million and $339 million in federal funding for Mississippi in 2023 and 2024, respectively.

Hilltop’s study consists of three parts:

1. A discussion of the current Mississippi Medicaid program, the expected effects of Medicaid expansion, a brief literature review on the effects of Medicaid expansion, the assumptions and methodology for this study, and the limitations of our approach.
2. The estimated effects of Medicaid expansion from 2023 to 2028 on Medicaid enrollment, Medicaid costs, direct tax revenue, indirect tax revenue and other economic effects, cost offsets within Medicaid and from other state spending sources, and uncompensated care for Mississippi hospitals.
3. Focusing on Mississippi’s hospital landscape, a forecast of the financial health of the state’s government-owned, private nonprofit, and private for-profit hospitals with—and without—Medicaid expansion.

Hilltop’s methodology differs from the typical Medicaid expansion study in three important ways. The first difference from other Medicaid studies is the use of capitation rate certification reports as a source of cost data. Second, the study includes the financial benefit to government-owned hospitals resulting from Medicaid expansion as a cost offset. Third, the study projects the financial performance from 2023 to 2028 for government-owned hospitals, private nonprofit hospitals, and private for-profit hospitals with—and without—Medicaid expansion.

Hilltop’s study, titled The Economic Impact of Medicaid Expansion in Mississippi, 2023–2028, is presented in a full technical report and a summary report. In addition, a literature review has been published. The research team included Principal Data Scientist Morgan Henderson, PhD; Principal Policy Analyst Charles Betley, MA; Chief Data Scientist Ian Stockwell, PhD; Deputy Director Alice Middleton, JD; Policy Analyst Matthew Clark, MPH; and Executive Director Cynthia Woodcock, MBA.

The Center for Mississippi Health Policy also published an issue brief that summarizes the study findings.