States that expanded Medicaid over the last few years are about to fund a greater portion of the health insurance program, as federal contributions provided through Obamacare decline.
Medicaid spending by the 31 states and District of Columbia that expanded the program is projected to climb 5.9 percent on average next year, according to the Kaiser Family Foundation’s annual Medicaid survey released Thursday. Growth has been slower over the last two years, totaling 1.9 percent in 2016 and 2.4 percent the year before.
State spending is projected to grow faster because starting next year, states must kick in 5 percent of the cost of patients who are newly eligible for Medicaid under the healthcare law’s expansion. Until now, the federal government has covered the total cost for those new enrollees. The federal share will further decline to 90 percent in 2020.
Medicaid spending also is growing in states that didn’t expand Medicaid, but more slowly. The Kaiser survey projects that it will grow by 4 percent next year.
Whether to expand Medicaid has been a major sticking point for states as the Obama administration implements the Affordable Care Act. Many Republican-led states refused to expand the program to include people up to 138 percent of the federal poverty level, even though the federal government footed most of the bill for the new enrollees.
There was a major enrollment boom in Medicaid in 2014, as several dozen states expanded the program, but the rapid growth has since slowed. The Kaiser survey projects that Medicaid enrollment will grow by 3.3 percent next year, after growing 13.2 percent in 2015 and 3.9 percent this year.
Those resistant to expanding Medicaid have pointed to some states that have struggled in recent years to meet their obligations to the program, which is funded partly by federal revenues and partly by state revenues. Kaiser researchers noted that a 70 percent drop in crude oil prices since 2014 has hurt tax revenue in states such as Alaska and North Dakota, causing budget shortfalls that hurt their ability to fund Medicaid.
“Pressure to control Medicaid spending continues as growth in overall state revenues slows, or in some states, declines,” the report said.
