Medicaid Expansions

As states continue to look for new ways to balance their budgets, early results from states that have expanded Medicaid show significant state budget savings after just the first year of expansion. Twenty-six states have expanded Medicaid—this brief focuses on the budget impact in two states: Kentucky and Arkansas. Both states report expansion-related savings and Arkansas reports new revenues. When projected forward, these financial gains are likely to exceed expansion-related costs for years to come. These early savings point to Medicaid expansion paying for itself, at least through SFY 2021, while generating major gains in coverage and reducing the number of uninsured.

This brief provides an overview of the role of Section 1115 waivers in expanding Medicaid coverage since the enactment of the ACA.  The brief also highlights key themes in these waivers including implementing the Medicaid expansion through a premium assistance model, charging premiums, eliminating certain required benefits (most notably non-emergency medical transportation), and using healthy behavior incentives as well as provisions that CMS has not approved.

New preliminary data from the Medicaid Budget and Expenditure System (MBES) released by the Centers for Medicare and Medicaid Services (CMS) details for the first time the number of adults enrolled in Medicaid under the new Affordable Care Act (ACA) Medicaid expansion category. The data show that as of March 2014, among 48 states reporting data, 4.8 million adults out of the total 54.1 million individuals enrolled in Medicaid were in the ACA Medicaid expansion category. These data provide another element of Medicaid enrollment that differs from other enrollment data released from CMS as part of its Medicaid and CHIP Performance Indicator Project, which provide point-in-time Medicaid and CHIP enrollment data to support program management and oversight. These two data sets are not comparable; they have different purposes and include different populations. This issue brief provides an overview of the new data as well as how it differs from the Performance Indicator data.

The ACA has contributed to a significant transformation of Medicaid, broadening it as the base of coverage for the low-income population and accelerating state efforts to move from antiquated, paper-driven enrollment processes to a new modernized enrollment experience for individuals. January 1, 2015 marked the first anniversary of key ACA Medicaid provisions, including the Medicaid expansion to low-income adults and new rules for streamlined enrollment and renewal processes that coordinate across insurance affordability programs. This 13th annual 50-state survey of Medicaid and CHIP eligibility, enrollment, renewal, and cost-sharing policies as of January 2015 provides a snapshot of state Medicaid and CHIP policies in place one year into the post-ACA era.

In the twenty-three states that have decided against expanding Medicaid under the Affordable Care Act, uninsured adults who would have been eligible for Medicaid and have incomes at or above the federal poverty guidelines are generally eligible for Marketplace premium tax credits and plans with generous benefits. This study compared estimated out-of-pocket spending for care and premiums, as well as the financial burdens they impose, for the families of these adults under two simulation scenarios: obtaining coverage through a silver plan with subsidized cost sharing and enrolling in expanded Medicaid. Compared with Marketplace coverage, Medicaid would more than halve average annual out-of-pocket spending ($938 versus $1,948), while dramatically reducing the percentage of adults in families with out-of-pocket expenses exceeding 10 percent or 20 percent of income.