Senior Policy Analyst
Conservative critics of the Affordable Care Act’s Medicaid expansion are noting strong enrollment in Virginia’s Medicaid expansion to revive a debunked claim that the expansion puts state budgets at risk. They claim that Virginia’s enrollment is exceeding expectations and that states expanding Medicaid therefore can’t accurately forecast the effect on their budgets. In reality, while Virginia’s enrollment occurred more quickly than expected due in large part to state outreach and enrollment strategies, it still remains in line with forecasts.
When Virginia began signing people up for Medicaid last November (for coverage beginning this January), expansion critics seized on news stories noting strong initial enrollment. The main reason for the strong numbers, however, was Virginia’s strategies that helped it enroll large numbers of eligible people quickly and efficiently. These include using available data to identify people already participating in SNAP (food stamps), who are certain to be eligible for Medicaid, and connecting them with coverage, and moving people previously covered under limited Medicaid benefits waivers (such as the Commonwealth’s family planning services waiver) into expansion coverage.
Virginia’s use of these efficient strategies drove the enrollment of 200,100 Virginians in expansion coverage on January 1, 2019. But enrollment growth since then has been modest and, as of May 3, some 272,000 Virginians are enrolled in the expansion, the state reports. That’s well within the projections of Virginia analysts and other experts before the expansion began: the state’s Medicaid agency projected 400,000 people could gain coverage; the Urban Institute, a total Medicaid enrollment increase of 423,000 people; and Virginia’s Joint Legislative Audit and Review Commission, about 300,000 in expansion coverage.
Expansion critics have long claimed that higher-than-expected enrollment poses a threat to state budgets, but we and others have debunked that claim. “Claims that the costs of Medicaid expansion have far exceeded expectations are overstated, misleading, and substantially inaccurate, based on a review of the credible evidence from either academic or government sources,” concluded one review of expansion cost studies.
Many states have found that expansion has saved them money because, as more people gain coverage, states can spend less on programs that serve the low-income uninsured population, like state mental and behavioral health programs. States that levy a tax on the managed care plans that serve Medicaid beneficiaries have collected more revenue. What’s more, Virginia is one of a group of states that are using the revenue from an increase in a state tax on health care providers to fund the entire state share of expansion costs.
As policymakers in North Carolina and elsewhere continue to debate whether to expand Medicaid, they should look to the established research showing that Medicaid expansion has led to large coverage gains and improved health outcomes for beneficiaries, all without negatively affecting state finances.