Legislatures are facing painful choices, as the growing demands of vastly expanded Medicaid programs in their states devour budget dollars that would have otherwise been available for education, transportation, pensions, or other major budget items.
The states that opted into Obamacare’s Medicaid expansion are learning a brutal math lesson, as the number of enrollments has surged far past projections, in some cases by more than double. The Affordable Care Act originally enticed many of these states with the promise of federal aid to cover 100 percent of the costs of the new enrollees, but, like so many federal programs, Washington’s commitment to bear the full costs is short term and incomplete.
The heart of the problem is that Medicaid was originally enacted to provide health coverage for poor women, children , and families, but under Obamacare, eligibility was expanded to allow states to offer Medicaid coverage to able-bodied, working age adults who earn less than 138 percent of federal poverty level (currently $16,243 for an individual). Thirty states and the District of Columbia have so far chosen to do so.
The deficits facing legislators in expansion states are overwhelming. According to an Associated Press report, Kentucky, for example, had almost 311,000 new Medicaid enrollees in fiscal year 2014. This figure is more than double what was projected for 2014, and more than they expected even through 2021. Kentucky was forced to revise its Medicaid cost estimate from $33 million to $74 million for fiscal year 2017, and the projection for 2021 is now a staggering $363 million.
One Kentucky state senator who opposed the Medicaid expansion told the AP that this had created a “monstrous hole” in their budget that they did not know how to fix. “The two biggest things that keep me up at night are state pensions and the cost of expanded Medicaid,” said State Sen. Chris McDaniel.
States are already struggling under these costs. What happens in 2017 when the federal government’s portion of the bill will start scaling back, eventually down to 90 percent? And even that promise is not set in stone. Another problem, as I pointed out last month, is that the states are on the hook for 50 percent of the administrative costs incurred in signing up new Medicaid enrollees.
Overall, at least 14 states have new Medicaid enrollments that have exceeded their original projections, according to an AP analysis of state budget projections, Medicaid enrollments, and cost details in the expansion states. At least seven have increased their costs estimates for 2017 like Kentucky had to do. A research report released last April from the Foundation for Government Accountability shows that 17 states were over their projected 2014 enrollment, and 16 states had already enrolled more than they projected for the lifetime of expansion.
The AP further reported that California had enrolled nearly 2.3 million people — almost three times what they estimated. Washington’s enrollment more than doubled. Oregon’s enrollments are 73 percent higher than projected. Michigan’s estimated costs increased by 50 percent. Ohio’s projected costs more than doubled … do we need to continue?
Perhaps the biggest tragedy of all is that expanding Medicaid to able-bodied, working age adults means taking scarce budget dollars away from the poor children and families that the law was originally enacted to benefit, and who are most in need.