LANSING – Governor Rick Snyder appears open to expanding Medicaid coverage under the federal Patient Protection and Affordable Care Act as a study to be released Sunday showed the state could save $1 billion over 10 years by expanding the program.

The state currently has 1.9 million people in its Medicaid program, and expanding eligibility as the ACA proposes could add 289,000 in 2014 and another 331,000 by 2020, the report by the Center for Healthcare Research and Transformation said.

The combination of higher federal reimbursement rates for the newly eligible Medicaid recipients and the expected health care cost reductions from having more people in the state insured mean net savings from 2014 through 2019, and still leave the state with net savings through 2023, the report said.

Snyder said he is still reviewing the Medicaid expansion provisions of the ACA, but told Bloomberg, “My gut reaction is it probably has some benefits.”

Sara Wurfel, press secretary for the governor, said he and administration officials were still trying to determine for themselves what the effects of any changes in Medicaid might be, both short term and long term.

“Those are exactly the kinds of issue the governor and the administration are looking at,” Wurfel said of the information in the report, though she could not comment on the report itself, having not yet seen it.

One hitch to the changes, should Snyder decide to move ahead, could be House Republicans, who so far have balked at any state changes tied to the federal act.

The report showed the new recipients would cost the state $3 million for their benefits in 2014. But that would be offset by $271 million in federal reimbursements and reductions in health care costs that year.

Over the 10 years, the extra recipients would cost the state $2.25 billion. But savings and additional federal reimbursements would total $3.23 billion, a savings of $983 million.

The federal funds come from the increased reimbursement under the act. From 2014 through 2017, the federal government covers all of the costs of the new enrollees. After that, reimbursements drop gradually to a 90/10 split in 2020. But that is still more than the 66.39 percent the federal government covers of current enrollees in the state, the report said.

Other savings through the new eligibility include coverage of patients in the community mental health system and for prisoners receiving care in non-correctional facilities.

But the report also expected the state would save through reductions in health care premiums because health plans were spreading their risk across more people and hospitals had less uncompensated care being passed on to insurers.

Studies have also shown that bringing low-income individuals into the Medicaid program would improve the health of those individuals, the report said. Participants in the study, in Oregon, also showed less health care-related debt.

On the other hand, opting out of the expansion, while it would allow some federal grants to low-income residents to purchase health insurance, could hurt hospitals. The new law reduced disproportionate share hospital payments under the assumption that more people will be insured and uncompensated care will decline. Without the Medicaid expansion, the report said, uncompensated care, which is up 33 percent between 2007 and 2010, could increase further.

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