By Joe Touschner
Each year, the Kaiser Commission on Medicaid and the Uninsured reports on the findings from its survey of budgets and enrollment among state Medicaid programs. (The budget survey is not to be confused with the Kaiser-Georgetown CCF survey of Medicaid and CHIP eligibility and enrollment policies coming in January). This year’s edition is particularly interesting because it gives us the first nationwide look at how the ACA’s adult Medicaid expansion is actually affecting Medicaid trends. While there have been a lot of predictions about how the ACA expansion would affect Medicaid, now we have some data. And because some states adopted the expansion on January 1 while others remain reluctant, there are some interesting comparisons to draw between expansion and non-expansion states.
The survey reports final enrollment and budget numbers for state fiscal year 2014 as well as enacted amounts for 2015; it’s important to remember that states that expanded on January 1, 2014 did so in the middle of fiscal 2014. Expansion effects are expected to be even more pronounced in state fiscal year 2015, with the expansion in effect all year.
The data show that with the expansion going into effect in many states, both enrollment and spending in Medicaid were up for 2014. Nationwide, enrollment rose about 8% while total (federal and state) spending was up roughly 10%. But it’s also clear that states that chose expansion are getting a good deal due to the 100% federal contribution for expansion coverage. Collectively, expansion states covered 12.2% more people in Medicaid in 2014 but invested only 6.6% more state dollars into the program. With the expansion fully in effect for 2015, the difference should be even greater. As shown in the figure below taken from Kaiser’s report, expansion states are expecting to extend coverage by another 18.0% in fiscal 2015 while spending only 4.4% more in state funds. On the other hand, non-expansion states saw more modest enrollment growth of 2.8% in 2014, but had a spending increase of 6.1%.
The bottom line seems to be that over 2014 and 2015, Medicaid expansion has not led to higher state spending growth for the program relative to non-expansion states, but it has resulted in significant coverage gains. Taking federal contributions into account, total spending growth has roughly tracked enrollment growth. For more, see the full issue brief.
