California is on the hook for $1.2 billion more in Medicaid costs than previously expected as nearly a third of the state's population will now be on the government program thanks to an expansion through President Obama's health care law.
As the Los Angeles Times reported, the administration of Gov. Jerry Brown has revealed that the state now expects 1.4 million more Medicaid beneficiaries than previously projected, bringing the state total to 11.5 million.
Obamacare raised the income threshold for enrollment in Medicaid, which expanded the number of individuals eligible. Though the federal government is slated to pick up the tab for the expansion through 2016, after that, states will have to start kicking in. In the meantime, California will still have to cover nearly half of the cost of new enrollees who would have been eligible anyway under the previously existing program.
There was always a population of individuals who were theoretically eligible for Medicaid, but who never bothered enrolling. But the aggressive push by California to get people to sign up for coverage also got them to enroll, a phenomenon that's been described as the "woodwork" effect.
California's announcement could bolster the case of those opposing the Medicaid expansion in other states, because proponents have relied on the idea that participating the expansion represents free money from the federal government and is cost free to the states.