By Jonathan Ingram, Nic Horton and Josh Archambault—Mr. Ingram is Research Director, Mr. Horton is a Policy Impact Specialist and Mr. Archambault is a Senior Fellow at the Foundation for Government Accountability.
Across the country, governors and state lawmakers have circled “2017” on their calendars. This is the first year that the enhanced federal funding for Obamacare’s Medicaid expansion starts to fade away and states will have to scramble to find new funds to pick up their share of the expense. As it turns out, “free money” comes at a cost.
But a new report from the Foundation for Government Accountability (FGA) reveals that the fiscal pain soon coming to states may be even worse than anticipated.
* In Ohio, Medicaid expansion ran $1.5 billion over budget in its first 18 months.
* The state of Washington had to increase its biennium budget by $2.3 billion to deal with higher than expected Medicaid expansion costs and, having now surpassed even those revised projections, expansion overruns will only continue to climb.
* Illinois’ Medicaid expansion ran $800 million over budget in 2014 and has now signed up more able-bodied adults than state officials predicted would ever be eligible.
*In Kentucky, Medicaid expansion is now projected to run a combined $1.8 billion over budget in fiscal years 2014 and 2015.
These states aren’t outliers. They’re the norm.
Expansion States Blow Past Enrollment Projections
The Foundation for Government Accountability analyzed Medicaid expansion enrollment for 17 states.The remaining expansion states were excluded because they did not produce publicly available enrollment projections, expanded Medicaid eligibility prior to Obamacare, or refused to provide enrollment projections and/or actual enrollment data in response to public records requests.
Of the 17 reviewed states, every single one far surpassed projected enrollment in 2014. In fact, these states surpassed projections by an average of 91%.
But the news gets worse for state budgeters, as 2017 quickly approaches: each of these states have also surpassed their projected maximum enrollment. And these states didn’t just slightly exceed projections – they blew past them, by an average of 73%.
Brace Yourself Taxpayers
With higher-than-expected enrollment comes higher-than-expected costs. States that opted into Medicaid expansion will soon face increased costs of equal proportion as federal funding for the expansion begins to drop in 2017.
The fiscal pain could be starker for states if congressional Republicans follow through on their pledge to roll back the immoral, enhanced funding for the Obamacare expansion.
In fact, a bill recently filed by Congressman Bruce Westerman (R-Arkansas) would do just that, resetting expansion funding to the traditional Medicaid matching rate.
Even if expansion states had the foresight and self-control to set aside tax dollars for their expansion matching funds, Obamacare’s Medicaid expansion enrollment explosion means state budget writers will have to dig even deeper into public programs or into taxpayers’ pockets to pay for this new Obamacare program.
Obamacare Puts Truly Needy Patients On The Chopping Block
Where will states find the money to pay for this enrollment surge?
Obamacare’s perverse funding formula for able-bodied adults creates a massive new incentive for states to siphon away resources from the truly needy, to help pay for these cost overruns.
After all, the matching rate for covering able-bodied adults is nearly twice as high as the matching rate for covering seniors, poor children and individuals with disabilities.
If state budget writers can’t find the money there, cuts to public safety, education and infrastructure will surely be on the horizon.
Obamacare’s Medicaid expansion has created an imminent disaster for taxpayers, state lawmakers, and patients alike. It's only a matter of time before the full fiscal havoc arrives in expansion states. Lawmakers in non-expansion states should take note and be glad they haven’t subjected their states to the same fate.
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