Monday, July 20, 2015
Associated Press
ATLANTA
More than a dozen states that opted to expand Medicaid under the Affordable Care Act, including Ohio, have seen enrollments surge way beyond projections, raising concerns that the added costs will strain their budgets when federal aid is scaled back starting in two years.
Some lawmakers warn the price of expanding the health care program for poor and lower-income Americans could mean less money available for other state services, including education.
In Kentucky, for example, enrollments during the 2014 fiscal year were more than double the number projected, with almost 311,000 newly eligible residents signing up. That’s greater than what initially was predicted through 2021. As a result, the state revised its Medicaid cost estimate from $33 million to $74 million for the 2017 fiscal year. By 2021, those costs could climb to a projected $363 million.
“That is a monstrous hole that we have got to figure out how to plug, and we don’t know how to do it,” said Kentucky state Sen. Chris McDaniel, a Republican who leads the Senate budget committee and opposed expansion. “The two biggest things that keep me up at night are state pensions and the cost of expanded Medicaid.”
For patients who have only recently gained access to health care, the program is about far more than dollars and cents. And supporters downplay the budget concerns, pointing to studies that indicate the economic benefits of expanding health care will result in significant savings over time.
Several expansion states already have revised their budget estimates due to the larger- than-expected enrollments, according to an Associated Press review.
McDaniel said the added Medicaid costs will reduce the pool of money that can be invested in higher education, pension plans or other services.
In Ohio, the state’s share to cover those in the expanded Medicaid program in 2017 is more than twice what was projected, with officials now expecting to pay $130 million.
But the Gov. John Kasich administration contends the cost is more than offset by revenue generated from the Medicaid expansion population through an insurance tax and the state sales tax. It estimates that Ohio will see $301 million in tax revenue from the group in fiscal year 2017.
The administration also is quick to point out that Ohio hasn’t been as affected by the so-called woodwork effect, when people who were already eligible for the program become aware of it and enroll. Such enrollees would have cost the state more money.
Thirty states and the District of Columbia have expanded Medicaid, or plan to do so, to include all adults with incomes at or below 138 percent of the federal poverty level, currently $16,243 for an individual.
The federal government agreed to pay all costs for the new enrollees through 2016, but it will begin lowering its share in 2017. States will pay 10 percent of the costs by 2020.