Woodwork Medicaid enrollment may strain budgetsNews added by Benefits Pro on May 15, 2014
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By Kathryn Mayer

Thanks to the Patient Protection and Affordable Care Act, Medicaid enrollment is on the rise — even in the 26 states that chose not to expand the program under the law.

That increase, specifically, is due to the “increased outreach and awareness” — what researchers at Avalere Health, who in new analysis, call the “woodwork effect.”

According to their analysis, 17 of the 26 states that did not expand Medicaid in the first three months of 2014 still reported growth in Medicaid enrollment, ranging from 0.1 percent in Texas to 10.1 percent in Montana.

While it might sound good at first glance for the administration’s PPACA numbers, that unexpected enrollment has a downside: unexpected costs.

Avalere researchers said these enrollees might place a strain on state budgets, since states are required to contribute to the cost of their coverage based on traditional Medicaid matching rates.

“Though new eligibles are 100 percent federally funded through 2016, states only receive their standard matching rate for these previously eligible beneficiaries,” said Caroline Pearson, vice president at Avalere Health. “As a result, many of these non-expansion states that politically oppose the ACA are now facing unexpected financial and operational pressure due to woodwork enrollment.”

In total, the consulting firm said, the 17 states that experienced Medicaid enrollee increases despite not expanding the program reported 550,300 new beneficiaries between October and March — a 2.8 percent average enrollment growth. Enrollment growth exceeds 50,000 beneficiaries in four states: Georgia, North Carolina, South Carolina and Tennessee.

“The push to enroll in exchanges has brought a substantial number of new beneficiaries into Medicaid, even in states that decided not to expand their Medicaid programs,” said Matt Eyles, executive vice president at Avalere Health. “Though expansion states saw larger total enrollment increases, enrollment of these previously eligible individuals is significant in many non-expanding states.”

Researchers said they expect woodwork enrollment will continue throughout 2014, totaling higher enrollment, since Medicaid enrollment never closes.

Originally published on BenefitsPro.com
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