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Report: Even States Not Expanding Medicaid Will See Surge In Spending, Enrollment

Medicaid enrollment is expected to surge by nearly 12 percent next year in states expanding the program under the health law, but even states that will not expand eligibility project a 5 percent jump in the number of people enrolled in the state-federal health insurance program for the poor, according to a new report issued Monday.

Total federal and state spending on Medicaid in 2014 is expected to increase 13 percent in states that expand eligibility, and nearly 7 percent in those not expanding, said the survey of state Medicaid officials by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. (KHN is an editorially independent program of the foundation.)

State spending growth was slightly lower for the 25 states that are moving forward with the Medicaid expansion (4.4 percent) compared to the remaining states (6.1 percent).  The lower growth rates  for the states that are expanding may be in part because many project they will save money as new federal dollars replace state spending on the poor, the report said.

Twenty five states (inlcuding the District of Columbia) are expanding Medicaid to cover everyone under 138 percent of the federal poverty level, or $15,856 for an individual in 2013. The expansion was made optional by the Supreme Court last year.  Although the federal government is paying full cost of the expansion through 2016 and no less than 90 percent thereafter, many Republican-controlled states said they could not afford the expansion.

States who opted against the expansion will still see enrollment and spending increase under existing eligibility guidelines because of intensive outreach efforts related to the health law and because the makes it easier to sign up for coverage through the new online health insurance exchanges, the report said.

Medicaid enrollment growth slowed in 2013 to 2.5 percent on average across the states — the lowest increase in six years since the since the start of the economic downturn. Overall, enrollment growth across the country should average 8.8 percent next year, the report said.

Increases in state spending reflect costs related to increased participation among individuals currently eligible for Medicaid reimbursed at a state’s regular Medicaid match rate. This will occur in all states, even those not moving forward with the expansion.

Only three states (Louisiana, Maine, and Wisconsin) projected that Medicaid enrollment would decrease in FY 2014.