I’m in total shock…
On Donald Trump’s victory Republicans in Congress are primed for an ambitious agenda, and not a moment too soon. One immediate problem is ObamaCare’s expansion of Medicaid, which has seen enrollment at least twice as high as advertised.
Most of the insurance coverage gains from the law come from opening Medicaid eligibility beyond its original goal of helping the poor and disabled to include prime-age, able-bodied, childless adults. The Supreme Court made this expansion optional in 2012, and Governors claimed not joining would leave “free money” on the table because the feds would pick up 100% of the costs of new beneficiaries.
In a new report this week for the Foundation for Government Accountability, Jonathan Ingram and Nicholas Horton tracked down the original enrollment projections by actuaries in 24 states that expanded and have since disclosed at least a year of data on the results. Some 11.5 million people now belong to Obama-Care’s new class of able-bodied enrollees, or 110% higher than the projections.
Analysts in California expected only 910,000 people to sign up, but instead 3.84 million have, 322% off the projections. The situation is nearly as dire in New York, where enrollment is 276% higher than expected, and Illinois, which is up 90%. This liberal state triumvirate is particularly notable because they already ran generous welfare states long before ObamaCare.
The data are also an embarrassment to Kentucky (134% over) and Ohio (60% over) because the legislatures in those states rejected expanding. They were unilaterally overruled by Democratic Governor Steve Beshear and Republican John Kasich. Arkansas’s compromise Medicaid expansion was hailed as a “private option,” but 51% more people have signed up for this public option than voters were told at the time.
The Foundation for Government Accountability numbers exclude states that expanded recently like Alaska and Louisiana, where it is too soon to draw conclusions. The study also omits Delaware, Massachusetts and Vermont, which obtained Medicaid expansion waivers prior to ObamaCare.
New or enlarged entitlements always overwhelm projections, because of so-called “woodwork effects” where added benefits draw out people the budget gnomes weren’t expecting. But there’s enough experience now where these effects should have been built into the models. Governors ignored all this to make expanding seem less costly than it would be when the bill came due.
The state spending share of new Medicaid enrollment will rise to 5% next year and then to 10% by 2020, up from 0% today. The enrollment overruns mean these states will have less to spend than they planned for every other priority, especially the least fortunate. The Governors who didn’t expand and withstood a hail of political and hospital censure are looking prescient.