Soaring Medicaid Enrollment Could Hit State Budgets
Policy + Politics

Soaring Medicaid Enrollment Could Hit State Budgets

iStockphoto/The Fiscal Times

Under the Affordable Care Act’s Medicaid expansion, enrollment in the program is soaring past expectations in a handful of states, raising some concerns about whether states will have trouble covering the costs down the road.

So far, some 12 million people have enrolled in Medicaid through the expansion—with most states that expanded their program seeing sign-ups significantly surpass their expectations. At least seven states saw massive waves in enrollment totaling about 1.4 million more people than originally estimated, Politico first reported.

Related: Medicaid Expansion Gains in Red States

The ACA originally expanded Medicaid in every state, but a 2012 ruling by the Supreme Court gave states the right to choose whether they wanted to expand their programs. Twenty-one states decided to opt out of the expansion, with many governors, most of them Republican, saying their states wouldn’t be able to handle the cost of expanding their programs.

Under Medicaid expansion, the federal government covers 100 percent of the program in order to expand access to all low-income adults earning up to 138 percent of the federal poverty line. After that, federal funding covers 90 percent of the cost and states must pick up the rest.

Republican governors like Wisconsin’s Gov. Scott Walker and Florida’s Rick Scott have been staunchly opposed to expansion and have sounded alarms over potential costs once the federal government stops picking up the entire tab.

They’ve been criticized by Obamacare proponents who chide them for leaving federal funding on the table—especially in the first two years. Wisconsin Democrats released a study last month claiming opting out of Medicaid expansion would save the state $400 million over two years. Now as other states Medicaid rolls grow, there is concern that it could cost those states more than anticipated after 2016 when they are on the hook for paying 10 percent.

Related: Arkansas Republican Gov Gambles on Medicaid Expansion

In Illinois, for example, the state originally expected to cover about 199,000 people in 2014. Now, that number is at about 634,000—with most enrollees tending to be younger, white childless adults.

Likewise, the state of Washington estimated about 190,365 people would be enrolled by March—though it was actually around 535,000. Enrollment in Michigan shot up to 582,000 people, despite the state anticipating around 323,000 enrollees.

Separate from the population now eligible for Medicaid through the ACA expansion, some health policy experts say new attention to the program could create a “woodwork” effect for people who are eligible for traditional Medicaid but who didn’t enroll until now—meaning even more people on the Medicaid rolls.

In California, for example, enrollment for traditional Medicaid was about 200,000 people higher than expected, Politico noted.

The potential budget concerns for states that have expanded their Medicaid programs are being eyed closely by other states that haven’t expanded their programs, but are considering doing so in the future. Both Wisconsin and Florida state lawmakers are contemplating ways to expand their program.

Meanwhile, the states that have opted in are now looking at new enrollment numbers to figure out new cost estimates once the federal government stops picking up the entire check.

Of course, the good news is that since the Affordable Care Act took effect, the uninsured rate has dropped to the lowest level in recent history—with just 11.9 percent without health insurance. Much of that has to do with Medicaid expansion and the ACA’s health exchanges, among other provisions, including allowing children to be on their parent’s plan until age 26.

Top Reads from The Fiscal Times: