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State-sponsored retirement savings can cut Medicaid spending

A study has found a correlation between increasing retirement savings and reducing Medicaid spending.

By Marlene Y. Satter | Updated on January 26, 2017
Over a 10-year period after a retirement savings plan is introduced, the analysis found, 15 states would save more than $100 million each. (Photo: iStock)

As states are increasingly looking at ways to reduce their Medicaid spending, a study says that a state-sponsored retirement plan could lead the way toward that goal.

The study from Segal Consulting, titled “State Retirement Savings Initiatives Do More than Enhance Retirement Security for Private Sector Workers,” found that whether states give individuals access to a retirement plan “marketplace” or create a path toward retirement savings some other way, there is “a positive correlation between increased retirement savings sufficient to remove a percentage of currently vulnerable households off the poverty rolls by the time they retire, and a reduction in Medicaid spending.”

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