Unexpectedly robust Medicaid enrollment distresses state budgeters

At least 14 of the 30 states that took up the Affordable Care Act’s offer of federal aid to expand Medicaid are now fretting that they will have to make wrenching budgetary choices in two years, when the dollars from Washington start to diminish.

The problem is skyrocketing enrollment, according to an Associated Press analysis of state budget projections, Medicaid enrollments and cost details in the 30 expansion states.

Among the states seeing new enrollments fast outpace original projections are Oregon, which planned on 222,700 recipients signing up by the end of June but now counts 386,000—that’s a 73 percent difference—and Michigan, where soaring enrollment has pushed estimated costs upwards by 50 percent, AP reported.

California counted on 800,257 of its residents to enroll only to see three times more, close to 2.3 million, stream in. Kentucky’s projection was more than doubled, forcing the Bluegrass State to revise its Medicaid cost estimate from $33 million to $74 million for the 2017 fiscal year. By 2021, that bill could hit $363 million.

The AP article stated that Medicaid-expansion supporters expect to save money “eventually” by “doing away with some of their own services for the uninsured, such as mental and behavioral health programs, and by reducing payments to hospitals and other providers for treatment of the uninsured.”

In New Mexico, where enrollment has outstripped projections by 44 percent, state legislators are worried about having no choice but to cut spending on various vital services for low-income residents, including education, to pay for Medicaid expansion.

“When you’re looking at a state budget and there are only so many dollars to go around, obviously it’s a concern,” state Sen. Howie Morales, a Democrat, told AP. “The most vulnerable of our citizens—the children, our senior citizens, our veterans, individuals with disabilities—I get concerned that those could be areas that get hit.”

The Affordable Care Act calls for the federal government to pick up the full tab for Medicaid expansion for a three-year period ending in 2017, at which point states will begin transitioning to paying 10 percent by 2020.

To read the full AP story on the approaching budgetary struggles exacerbated by ballooning Medicaid enrollments, click here.