Oct. 7—Medicaid programs in all states—both expanding and non-expanding—will increase their enrollments and total spending next year, according to an annual report.

State Medicaid officials told the authors of the annual 50-state Medicaid Budget Survey by the Kaiser Commission on Medicaid and the Uninsured that the programs’ spending and enrollments will grow in FY14, regardless of whether they are expanding eligibility. Twenty-four states have formally decided to expand eligibility to all residents with incomes of up 138 percent of the federal poverty level, as authorized by the Affordable Care Act (ACA).

But states that have approved the eligibility expansion will experience much faster growth in enrollment and spending. Total Medicaid enrollment is expected to increase by 8.8 percent, with expansion states' enrollment increasing by 11.8 percent and non-expansion states increasing by 5.3 percent. Similarly, total spending will grow by 11.3 percent—led by 13 percent spending growth in expansion states versus 6.8 percent spending growth in non-expanding states.

"The large difference in total Medicaid spending growth across these groups primarily reflects the cost of covering newly eligible enrollees [that] qualify for the 100 percent federal funding," according to the report's authors.

The federal government will cover much of the costs of the newly eligible populations for three years before tapering to 90 percent of the costs in 2020. However, older, lower-matching rates will apply to the millions of new beneficiaries who were eligible under previous eligibility standards.

Although the eligibility expansion, which the Congressional Budget Office estimates will add 13 million beneficiaries to the program, has garnered the most attention, some enrollment restrictions also will go into effect. Thirteen states will implement Medicaid eligibility restrictions in FY14, according to the report, despite so-called maintenance of effort restrictions included in the ACA.

"However, these cuts are targeted to non-disabled adults; most of those that will lose Medicaid eligibility in these states will be able to obtain subsidies to purchase coverage in the new marketplaces," the report stated.

Publication Date: Monday, October 07, 2013