BEYOND THE NUMBERS
Media reports have expressed surprise, even concern, that early enrollment in Medicaid under health reform has outpaced enrollment in the new health insurance marketplaces so far. But, that was expected to happen, even before the well-documented technical problems affecting HealthCare.gov, the federal marketplace website.
The fact is, the quicker rate of Medicaid enrollments isn’t burdening states with unexpected costs — and it’s great news for the low-income individuals and families gaining coverage through the program, as research shows that Medicaid improves health and provides critical financial protection against catastrophic out-of-pocket medical costs.
Consider these key facts, which put the rate of Medicaid enrollments in context:
- The Medicaid expansion and subsidized coverage through the marketplaces, health reform’s two major coverage expansions, will eventually reduce the number of uninsured by 25 million. The Congressional Budget Office (CBO) estimates that increased enrollment under Medicaid and the Children’s Health Insurance Program (CHIP) will make up about half of that figure.
- Medicaid enrollment isn’t a threat to the marketplaces because people aren’t eligible for both Medicaid and marketplace subsidies. Under health reform, states can adopt the Medicaid expansion, which will cover individuals up to 133 percent of the federal poverty line who are not already eligible for Medicaid. For individuals with incomes up to 400 percent of the federal poverty line, health reform provides premium credits to help purchase coverage offered through the marketplaces.
This means that those who are eligible for Medicaid and CHIP are not eligible for premium credits to purchase coverage through the marketplaces. In other words, no one is unexpectedly choosing Medicaid coverage over subsidized marketplace plans and the fact that Medicaid enrollment is now outpacing marketplace enrollment doesn’t have an adverse effect on the marketplaces. (If their state isn’t adopting the Medicaid expansion at this time, individuals with incomes between 100 percent and 133 percent of the poverty line would be eligible for premium credits, however.)
- Medicaid enrollment was always expected to ramp up much faster than marketplace enrollment in 2014. For example, CBO estimates that Medicaid (and CHIP) enrollment will increase by 9 million in 2014, nearly 29 percent more than the projected enrollment for the marketplaces. (The difference would be even greater if all states had adopted the Medicaid expansion for 2014.) That makes sense. Unlike the marketplaces, which are entirely new, the Medicaid expansion builds on an almost 50-year-old program that already covers tens of millions of low-income beneficiaries and has established eligibility and enrollment systems and an existing array of managed care plans and health care providers.
Moreover, many people who will be newly eligible for the Medicaid expansion in 2014 are low-income individuals and families who are already eligible for and enrolled in other programs administered by states, which eases outreach and enrollment efforts. In addition, some states already had state-funded programs providing limited health coverage while others took up a health reform option to expand Medicaid early. These states are now automatically transitioning eligible individuals from these health programs to Medicaid.
- Both states and the federal government expected that health reform would spur greater enrollment in Medicaid and CHIP among people who are already eligible but unenrolled. Several of health reform’s features, such as the individual mandate and simplified application and enrollment procedures, encourage enrollment by low-income uninsured people who are eligible for their states’ existing Medicaid and CHIP programs. CBO estimates and state analyses examining the Medicaid expansion’s impact have consistently accounted for (and in the case of some states, even exaggerated) this effect — so it won’t result in unexpected costs for state Medicaid programs.