A new report by the Urban Institute and funded by First Focus finds that states could in fact, save significant dollars by successfully implementing health reform.  This new report stands in stark contrast to other recent reports that states will bear significant costs to implement health reform.  These potential cost-savings couldn’t be more welcome news for states as they continue to grapple with unprecedented budget deficits and an increasing need for services.

While the report doesn’t include state-by-state estimates of potential savings, its does provide a range of what could be saved overall – between $40.6 billion to $131.6 billion during the 2014-2019 timeframe.  The report identifies three key ways that states could save dollars as they move forward on implementing health care reform that should be factored into any cost projections. The three key areas identified in the report for potential state savings include:

1) Eliminating Medicaid coverage for adults over 133% of the FPL and transitioning these individuals to coverage through the new exchanges

2) Replacing state and local spending on uncompensated care with federal Medicaid dollars

3) Replacing state and local spending on mental health services with federal Medicaid dollars.

As a former state advocate, I’m thrilled that this new report is available at this critical time when budgets are stretched thin and rhetoric has been laid on thick (especially the misrepresentation of the cost of health reform to states).  This report not only pushes back on these assumptions but also lays out another reason that states should be embracing reform as not only the right thing to do for their residents, but as the right thing to do for their budgets.