Dec. 5—The 25 states that opted not to expand Medicaid eligibility under healthcare reform added more people in the first month of marketplace enrollment than the 25 states that widened eligibility, as residents who were previously eligible for Medicaid but were not enrolled begin to sign up for coverage.

Only 25 states had formally expanded their Medicaid program’s eligibility to all residents with incomes of up to 138 percent of the federal poverty level, as authorized by the Affordable Care Act (ACA). Enrollment for the newly eligible began in October. But states that chose not to expand eligibility also saw a surge in October enrollments under their tighter eligibility standards.

States found more than 1.4 million applicants for insurance through the ACA marketplaces or state agencies were eligible for Medicaid and the Children’s Health Insurance Program (CHIP) in October, the Centers for Medicare & Medicaid Services (CMS) reported this week. The agency reported last month that another 183,396 applicants through the federal marketplace were found eligible for Medicaid. Taken together, non-expanding states added 880,415, or 54 percent, of newly enrolled Medicaid/CHIP beneficiaries in October, while 23 of the expanding states qualified 757,991, or 46 percent. When the later expanding states of Michigan and Ohio were added, total signups from the expanding states rose slightly to 763,348.

The total number of enrollees in October could rise further because some state figures are preliminary and might only represent the number of applications, which each could include more than one enrollee.

‘Woodwork Effect’ Evident

The surge in Medicaid and CHIP enrollment in non-expanding states appeared to confirm the beginning of the so-called woodwork effect, under which health policy experts projected many people who were unenrolled but eligible before the expansion would come forward during the federal marketplace enrollment push.

Although the rate of enrollments increased more in expanding states in October from previous months, non-expanding states garnered more enrollees because they include many of the states with the largest numbers of previously eligible but unenrolled residents.

The CMS report credited the enrollment increase to streamlined enrollment processes most states have implemented using ACA funding and to the increased publicity the ACA brought to the availability of Medicaid coverage. 

“Many states that are not expanding Medicaid, but have implemented the simplifications and modernizations provided for in the law, are seeing some increase in applications among already-eligible-but-uninsured state residents,” the report stated.

The woodwork enrollees could carry significant costs for states because states’ share of the costs of covering those pre-ACA Medicaid enrollees, which averages 43 percent, is significantly higher than the 0 to 10 percent costs states will bear for covering ACA expansion enrollees.

Enrollment Gaining Ground

The 1.6 million Medicaid approvals in October appears to put overall enrollments well along to the 8 million people the Congressional Budget Office estimated would gain Medicaid coverage in 2014, although no monthly CMS enrollment targets have been issued. Medicaid sign-ups—unlike private insurance coverage through ACA marketplaces—can continue throughout 2014.

The enrollment figures came as the Commonwealth Fund issued projections this week regarding the amount of federal funding that non-expanding states will lose—totaling billions of dollars by 2022—because they chose to forgo the 90 to 100 percent federal matching rate for those residents newly eligible for Medicaid by rejecting expansion.  States that stand to lose the most for their decision not to expand Medicaid are Texas ($9.2 billion by 2022), Florida ($5 billion), Georgia ($2.9 billion), Virginia ($2.8 billion) and North Carolina ($2.6 billion), according to the Commonwealth Fund.

Publication Date: Thursday, December 05, 2013