Declining To Expand Medicaid Is Costing States

Medicaid enrollment jumped by 14 percent on average across all 50 states and the District of Columbia, almost double the enrollment growth rate the year prior, according to the Kaiser Family Foundation’s annual Medicaid survey released Thursday. In a few cases, in fact, it was lower.

The 22 states that didn’t expand Medicaid eligibility as part of Obamacare previous year saw their costs to provide health care to the poor rise twice as fast as states that extended benefits to more low-income residents.

In a panel discussion, policy experts and state Medicaid directors described the recent peak in Medicaid enrollment and total spending growth during fiscal (FY) year 2015, while projecting muted growth in both enrollment and total spending for fiscal year 2016.

Financial analysts also note Medicaid enrollments tend to grow during tough economic times, which means states must be strong enough to continue to support the expanded programs through future downturns.

The health law gave states the option to extend Medicaid coverage to everyone with incomes up to 138 percent of the federal poverty level, or $16,242 for an individual.

This past legislative session, the legislature passed a short-sighted Medicaid Reform bill that is supposed to increase budget predictability and control costs. In California, which did expand, the Medicaid rolls ballooned by 30 percent. For example, the contribution from the federal government for Medicaid only increased 0.36 percentage points from 65.88 percent in fiscal year 2015 to 66.24 in fiscal year 2016.

That will soon have an effect on state budgets, with expansion states to pay a portion of costs to cover the new enrollees beginning in 2017.

Ohio Gov. John Kasich and New Jersey Gov. Chris Christie have faced criticism in their presidential races from more conservative candidates for choosing to accept Medicaid expansion in their states.

Despite the surge in enrollment, state Medicaid officials from Arizona, Colorado and Florida said they have seen no major problems with Medicaid enrollees getting access to health care. All told, 3.4 million Californians were added to the Medi-Cal rolls between September 2013 and July 2015.

The Kaiser report found states are becoming more active in changing how health care is delivered and paid for, and getting more involved in reducing smoking and improving healthy behaviors.

“States that opted to expand Medicaid saw significant gains in coverage, reductions in the uninsured, and access to additional federal funds”, said Diane Rowland, executive vice president of the Kaiser Family Foundation.