NCPA - National Center for Policy Analysis

ObamaCare Medicaid Expansion: Larger and More Expensive

February 11, 2011

The Patient Protection and Affordable Care Act's (PPACA) Medicaid expansion might be far larger -- and presumably far more expensive -- than previously estimated, says Peter Suderman, associate editor of Reason Magazine.

  • In addition to the higher level of allowable income, the Affordable Care Act expands eligibility to people under age 65 who have no other qualifying factors that would have made them eligible for Medicaid under prior law.
  • The estimated increase in Medicaid enrollment is based on an assumption that Social Security benefits would continue to be included in the definition of income for determining Medicaid eligibility.
  • If a strict application of the modified adjusted gross income definition is instead applied, as may be intended by the Act, then an additional 5 million or more Social Security early retirees would be potentially eligible for Medicaid coverage.

Numerous states are already in deep fiscal trouble thanks to their bulging Medicaid programs.  The PPACA calls for the federal government to pick up much of the cost of the Medicaid expansion, but states will still be responsible for coming up with tens of billions in extra funding over the next decade.

  • The bigger picture, of course, is that we still don't really know how this will play out.
  • Currently, for example, there are millions of individuals who are eligible for Medicaid or S-CHIP but not enrolled.
  • So it's at least possible that total enrollment will be lower than expected. (That said, most experts expect that the new law will actually bring many of the currently unenrolled out of the woodwork.)

All this should serve as yet another reminder that there are numerous reasons to believe that the PPACA might not work as planned -- and that it will cost taxpayers quite a bit more as a result, says Suderman.

Source: Peter Suderman, "Could ObamaCare's Medicaid Expansion Be Even Larger than Expected?" Reason Magazine, February 8, 2011.

For text:

http://reason.com/blog/2011/02/08/could-obamacares-medicaid-expa

 

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