Republican governors concerned about taking on extra costs declined to expand Medicaid under Obamacare, but their states are facing an even bigger cost increase than the states embracing expansion.
Over the last year, record numbers of low-income Americans enrolled in the government health insurance program for the poor, as many more became eligible for it under the Affordable Care Act and others who were already eligible were prompted to sign up for the first time.
Medicaid enrollment jumped by 14 percent on average across all 50 states and the District of Columbia, nearly double the enrollment growth rate the year prior, according to the Kaiser Family Foundation’s annual Medicaid survey released Thursday.
It’s not surprising that the enrollment increases and rises in total Medicaid spending was most pronounced in the 29 states that chose to make Medicaid available to Americans earning up to 138 percent of the federal poverty level, a provision of the healthcare law the Supreme Court made optional for states.
Related Story: http://www.washingtonexaminer.com/article/2574118/
But in the states that turned down Medicaid expansion, most of them led by Republicans, the state share of Medicaid spending increased even faster. Their Medicaid obligations grew by nearly 7 percent, compared with 3.4 percent in states that expanded the program.
That’s because states across the board saw more people sign up for Medicaid because of increased outreach efforts. In states with Medicaid expansion, the federal government paid 100 percent of the costs for many of the new enrollees, but states without expansion received only their regular federal match.
“States that opted to expand Medicaid saw significant gains in coverage, reductions in the uninsured and access to additional federal funds,” said Diane Rowland, Kaiser’s executive vice president.
That trend so far appears to undermine arguments by Republican governors who resisted expanding Medicaid on the grounds that it would saddle their state with unsustainable new costs and crowd out room for spending on other priorities.
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.
Fiscal arguments against Medicaid expansion could hold more water once the federal government stops paying the full cost of the new Medicaid enrollees. The federal match drops to 95 percent in 2017, and then to 90 percent four years later, where it remains indefinitely.
But some states with expanded Medicaid have recently issued reports showing that it would be a fiscal loss to their state should they rescind it.
Earlier this month, an independent consultant in Arkansas reported that ending Medicaid expansion would have a “substantial cost” for the state. Even after the federal match starts shrinking in 2017, Arkansas would stand to lose $438 million if it reverted to the traditional Medicaid program, the Stephen Group found.
A report by Deloitte earlier this year found that Kentucky experienced a net positive impact on its budget by deciding to expand Medicaid.
States will have to start chipping in more over the next few years. But when savings from a bigger insured population are realized, they may find it was cheaper to expand Medicaid than not to, some experts say.
“States will have to put up a share, but I think the net budget savings will continue,” said Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities. “I think they now see getting rid of [Medicaid] is going to be a hardship.”
