Medicaid expansion cost overruns are fueling budget challenges in several states, according to a new report from the Foundation for Government Accountability.
The study found that expansion enrollment led to cost overruns of 157 percent in the 31 states that expanded Medicaid to allow the inclusion of able-bodied adults. Researchers also discovered that expansion state enrollment was double what policymakers anticipated, and costs exceeded estimates by 76 percent.
One of the study’s authors, Jonathan Ingram, said expanding Medicaid means fewer resources available for the truly needy.
“Obamacare expansion has proven to be a disaster, leaving states with massive cost overruns that have shattered budgets, put the truly needy at risk, and left taxpayers on the hook–and projections are only getting worse,” he said in a press release.
Kansas is one of only a handful of states that hasn’t expanded Medicaid on the heels of Obamacare. However, lawmakers attempt to expand the program every session. The 2018 session is no exception.
A Kansas Senate committee is set to conduct a hearing on expanding Medicaid next week. Last year, former Gov. Brownback’s veto pen stopped a legislative effort to expand the program in Kansas. An attempt to override his veto in the House fell three votes shy.
Advocates for Medicaid expansion say the state is missing out on federal funding. However, the federal government began ratcheting down its portion of Medicaid expansion costs in 2017. By 2020, states will bear at least 10 percent of expansion costs. Meanwhile, Congress continues to examine ways to reduce or eliminate the federal government’s share of the program.
The FGA study notes that prior to Obamacare, states spent one out of every four dollars on Medicaid. After Obamacare, that number dipped. Now states are spending one out of every three dollars on Medicaid. That’s in part, because states signed up more able-bodied adults than anticipated.
Expansion advocates in Kansas project the state would add 150,000 more people to the Medicaid rolls with program expansion. According to the FGA study, expansion states grossly missed their enrollment projections. The Centers for Medicare and Medicaid Expansions underestimated enrollment by 36 percent, but their estimates were closer than many others. The Kaiser Foundation, for example, underestimated expansion enrollments by 60 percent.
“Ultimately, the takeaway is simple: everyone got it wrong. As a result, taxpayers are on the hook for more than twice as many able-bodied adults as promised, significantly contributing to the pending budget crises in states,” the study reads.
Its authors recommend Congress should take steps to ensure no new states expand Medicaid and states that haven’t expanded should continue to hold the line.
“As expansion enrollment and costs continue to soar, states that rejected expansion look smarter by the day. Reversing course now would be a horrible decision for their budgets, their taxpayers, and the truly needy in their states,” the report reads.
Gov. Jeff Colyer hasn’t signaled whether he would be willing to support expanding Obamacare in Kansas, but he told the Associated Press shortly after his inauguration that expansion prioritized helping able-bodied adults over the disabled.
The FGA report drew a similar conclusion.
“Policymakers must enact solutions that will protect resources for the most vulnerable and unwind these failed expansions,” Ingram said.