Soaring Medicaid Enrollment Cited as Argument Against Expansion

Enrollment in Medicaid under the Affordable Care Act is exceeding expectations in some states, which some ACA opponents are using as an argument against expansion, Politico reports.

Background

Under the ACA, the federal government will cover 100% of a state's Medicaid expansion costs through 2016. Afterward, the federal government will gradually reduce its contribution to 90%. In 2012, the Supreme Court ruled expansion is optional. Twenty-one states, most of which are led by Republicans, have opted out of the expansion.

Enrollment Exceeds Expectations

In some states that have expanded Medicaid under the ACA, enrollment has exceeded initial projections by more than 100,000. For example:

• Illinois enrolled 541,000 individuals as of December 2014, ahead of the estimated 199,000 sign-ups for 2014;
• Kentucky enrolled 311,000 adults by the end of fiscal year 2014, ahead of a projection of 148,000;
• Michigan enrolled about 582,000 individuals as of this month, ahead of a projected about 323,000;
• Minnesota enrolled 194,000 individuals by December 2014, ahead of projections for about 147, 000 people; and
• Washington enrolled 535,000 individuals as of March, ahead of expected enrollment of about 190,000.

State Leaders Cite Cost Burden

Despite the federal government picking up the majority of the cost of the expansion, some state leaders have said the costs that states must incur still are too great. According to Politico, they say that the higher-than-expected enrollment figures mean that costs also will be larger than anticipated.

For example, Florida Gov. Rick Scott (R) has said expanding Medicaid would cost the state $5 billion, adding that he could name only one health program -- Medicare Part D -- "that cost less than what they initially anticipated."

Meanwhile, some governors who have supported alternative expansions have cited financial concerns. Utah Gov. Gary Herbert (R), who has sought an alternative Medicaid expansion, said, "We're trying to cover as many people as we can afford," adding, "I don't know what that's going to work out to be right now."

Concerns Over Woodwork Effect

Meanwhile, states have also had concerns that Medicaid expansion will cause a "woodwork effect," in which individuals who had been eligible for Medicaid before the expansion took effect are now enrolling because of the attention to the program.

According to Politico, Medicaid enrollment generally has increased in states that have not expanded. The federal government picks up a lower share of traditional Medicaid costs.

Expansion Supporters Cite Economic Gains, Leveling Off of Enrollment

Meanwhile, expansion supporters have said additional costs are more than offset by health and economic gains.

Kentucky Cabinet for Health and Family Services Secretary Audrey Haynes, regarding expansion, said, "Can we afford not to do this?" Kentucky has had the second-greatest drop in the rate of uninsured. She added that the decision to expand Medicaid "is usually a political decision, not a policy and economic decision."

Meanwhile, officials in some states noted that while enrollment exceeded projections in the first year, the trend could level off. For example, more than 485,000 Ohio residents enrolled in Medicaid in the first year of expansion. By March, the numbers held at about 528,000 (Pradhan, Politico, 5/18).