Some GOP governors are saying: “I told you so.”
BY RACHANA PRADHAN
Medicaid enrollment under Obamacare is skyrocketing past expectations, giving some GOP governors who oppose the program’s expansion under the health law an “I told you so” moment.
More than 12 million people have signed up for Medicaid under the Affordable Care Act since January 2014, and in some states that embraced that piece of the law, enrollment is hundreds of thousands beyond initial projections. Seven states have seen particularly big surges, with their overruns totaling nearly 1.4 million low-income adults.
The federal government is picking up 100 percent of the expansion costs through 2016, and then will gradually cut back to 90 percent. But some conservatives say the costs that will fall on the states are just too big a burden, and they see vindication in the signup numbers, proof that costs will be more than projected as they have warned all along.
Obamacare originally expanded Medicaid — which traditionally served poor children, pregnant women and the disabled — to all childless low-income adults with incomes up to 138 percent of the federal poverty level (about $16,250 for an individual) across the country. But the Supreme Court made expansion optional in 2012. And 21 states, mostly with GOP governors, have resisted.
“The expansion of Obamacare will cost our state taxpayers $5 billion,” Florida Gov. Rick Scott said in an interview with POLITICO last week, referring to the 10-year cost. “Name the health care program — I think the only one is Medicare Part D — that cost less than what they initially anticipated…Historically, if you look at the numbers, with the growth in Medicare costs, Medicaid costs, it’s always multiples.” A bitter critic of Obamacare, Scott at one point surprisingly backed expansion, but withdrew his support earlier this year. His state legislature is deeply split on Medicaid policy.
In some states that did expand, the take-up has been startling — the result, officials say, of significant pent-up demand for coverage. In Illinois, nearly 541,000 people had signed up as of December, far beyond the 199,000 adults the state had estimated would enroll in 2014. The numbers increased to nearly 634,000 as of April.
In Washington, 535,000 people had signed up as of March — already beating the state’s January 2018 goal. Officials’ projection for March had been just 190,365 newly eligible enrollees.
In Michigan, where the first-year enrollment projection was 323,000 people, sign-ups hit 605,000 before falling back to 582,000 earlier this month. Kentucky signed up nearly 311,000 new adults by the end of its 2014 fiscal year, more than double its initial projection of 148,000. And in February 2014, Minnesota forecast that 147,000 newly eligible adults would enroll by December, but actual enrollment that month was at nearly 194,000.
Supporters of Obamacare say the enrollment surge might lead to some budget bumps down the road, but that the historic decline in the uninsured is a major achievement. In addition, they say the expansion is providing significant health and economic benefits to states that more than offset costs.
States — and hospitals and doctors — are getting billions of dollars from the federal government to cover low-income people, letting them save money on other programs that had been fully or partly funded through state dollars.
“Can we afford not to do this?” asked Audrey Haynes, secretary of Kentucky’s Cabinet for Health and Family Services under Democratic Gov. Steve Beshear. Kentucky under Beshear has fully implemented Obamacare, and it’s seen the second largest decline in its uninsured rate, after Arkansas.
But the money remains a concern not just for foes of expansion like Scott, but for GOP governors like Utah’s Gary Herbert who are trying to come up with some way for their states to expand. Herbert met with HHS Secretary Sylvia Mathews Burwell in late April and later voiced worries that any form of expansion could mean Medicaid consumes an even bigger chunk of the state budget starting in 2017.
“We’re trying to cover as many people as we can afford,” said Herbert, a Republican who supports expansion but has not yet managed to find the right mix of ACA expansion and conservative variants to bring his legislature on board. “Is it 90,000 or 110,000 people? I don’t know what that’s going to work out to be right now.”
The enrollment surge underscores those fiscal fears.
“If you’re spending twice as much on this program than expected, that’s twice as much money that’s being added to the national debt,” said Nicholas Horton with the Foundation for Government Accountability, a conservative think tank that has sought to highlight how much expansion enrollment has gone beyond expectations. Even if the states don’t pay nearly as much as the federal government for Medicaid expansion, he said, “You’re still going to spend more money overall. That’s still taxpayer money.”
Colorado has repeatedly revised its average enrollment estimates to account for increases. Early on, officials had projected that for the fiscal year ending June 30, about 144,000 new adults would be covered in any given month. In November, they bumped the number to nearly 205,000. It currently stands at about 234,000.
Beyond the low-income adults that became newly eligible for Medicaid because of the health care law, states have long feared the budget impacts of the “woodwork effect” — people previously eligible for Medicaid who are only enrolling now because of the broader outreach surrounding Obamacare. Generally, even the states that have shunned Obamacare Medicaid expansion are seeing enrollment growth. The federal government does not cover as much of traditional Medicaid costs; on average, the feds’ share is 57 percent and the states pay the rest.
That “woodwork” phenomenon could create budget concerns for states if enrollment is significantly higher than projections, acknowledged Matt Salo, executive director of the National Association of Medicaid Directors. But even that outcome, he stressed, “still solves a health care problem.” These people are now insured, and that could lead to less cost-shifting and crisis care that was also a fiscal strain on states.
And for states that expanded under the ACA, he said, “you don’t do an expansion and hope no one comes.”
“Everything’s got to make sense in a budgetary environment,” Salo said. “But you balance that with, isn’t this what you were trying to accomplish?”
In California, a spokesperson for the Department of Health Care Services said enrollment for new low-income adults has been on par with projections, but as of March enrollment of those previously eligible for Medicaid was about 200,000 people higher than expected. Kentucky similarly had expected about 17,000 of the previously-eligible population to sign up, but enrolled nearly 37,000.
But Haynes points to a Deloitte report that shows the substantial economic benefits Kentucky has gained from expanding Medicaid. In 2014, 12,000 jobs were created, the report said. And had the state not expanded, it would have incurred nearly $100 million in costs between 2014 and 2021.
Some state officials say that even though enrollment ballooned in the first year, the trend may be leveling off. Michigan says while enrollment to date has exceeded estimates, the numbers have started to decline as it begins annual redeterminations to make sure beneficiaries are still eligible for coverage.
In Ohio, where John Kasich was among the first GOP governors to embrace the ACA expansion, officials expected 366,000 people to enroll in the first year; more than 485,000 did. The numbers as of March stood at nearly 528,000.
Ohio Medicaid spokesman Sam Rossi says in spite of the higher expansion enrollment, overall Medicaid enrollment remains below projections by roughly 27,000 people because the state hasn’t seen as much “woodwork effect” as it anticipated. He adds that total Medicaid general revenue spending as of March was below estimates by $330 million.
Nathan Johnson, the chief policy officer for Washington state’s Health Care Authority, said that in some ways the booming Medicaid enrollment growth isn’t surprising. But the exact reasons as to why projections were so off have yet to be identified.
“We still assume that it’ll more than break even in terms of the financial component, even after higher than expected enrollment,” he said. A recent report funded by the Robert Wood Johnson Foundation seeks to quantify the state’s savings from expansion, but it assumes Washington will only have 480,000 newly eligible enrollees in the current fiscal year — a figure that has already been exceeded.
Haynes, of Kentucky, has strong words for the states that are shying away from enacting the Obamacare coverage expansion. Every state is tight on money, and people who say they can’t give health care to the poorest individuals either don’t understand the issue or it’s “political fodder.”
“It is usually a political decision, not a policy and economic decision,” she adds. “[Expansion foes] can make up whatever they want, to dispute those facts. But it’s made up. These are the facts.”
Read more: http://www.politico.com/story/2015/05/skyrocketing-medicaid-expansion-obamacare-republican-governors-118011.html#ixzz3aXB0gd7U