Medicaid “Welcome-Mat” Effect of Affordable Care Act Implementation Could be Substantial

The ACA will have important impacts on state Medicaid programs, likely increasing participation among populations that are currently eligible but not enrolled. The size of this “welcome-mat” effect is of concern for two reasons. First, the eligible but uninsured constitute a substantial share of the uninsured population in some states. Second, the newly eligible population will affect states’ Medicaid caseloads and budgets. Using the Massachusetts 2006 health reforms as a case study and controlling for other factors, researchers at the State Health Access Data Assistance Center (SHADAC) found that among low-income parents who were previously eligible for Medicaid in Massachusetts, Medicaid enrollment increased by 16.3 percentage points, and Medicaid participation by those without private coverage increased by 19.4 percentage points, in comparison to a group of control states. Their analysis has potentially important implications for other states attempting to predict the impact of this effect on their budgets.