CBO Releases Updated Medicaid Enrollment Costs on Obamacare Post Supreme Court

The Congressional Budget Office (CBO) has released their updated “score” of the Affordable Care Act (ACA) after taking into account the modifications made by the Supreme Court late last month. The ACA would have required states to increase their enrollment criteria to 133% of the Federal Poverty Level, or risk losing all Medicaid funds.  The Supreme Court ruled that the Federal government does not have the authority to cutoff all Medicaid funding if a state does not comply with the increased enrollment criteria, essentially making the Medicaid enrollment expansion a voluntary program for states to choose to participate in.  The updated score estimates an $84 billion savings due to the Supreme Court ruling limiting the Medicaid enrollment increase.

The planned ACA Medicaid expansions were to expand Medicaid coverage to an additional 17 million Americans and offered much more generous funding for the new expansion than existing Medicaid. States who participate in the expansion will receive a 100% match for newly enrolled recipients for the initial three years of the expansion, reverting to a 90% match for the following years. Typically, Federal Medicaid matching funds are less than 70%. Essentially, states would be on the hook for about 10% of the increased enrollee’s after the initial three-year period.  Almost immediately following the ruling, several governors began detailing their plans to accept or deny the additional enrollment and the federal funds that come with it.  To date, eight states have announced their plans to not enroll, while eleven states have voiced their support of the expansion.

Many governors and states are choosing to wait until after the Presidential election this fall to decide if they will increase their enrollment criteria for Medicaid. It is a difficult budget environment for existing Medicaid programs in many states, so many states could simply not afford the additional funds they will need to come up with after the first three years of the program.  Other states will find the federal matching funds simply too good of a deal to pass up.  If President Obama is reelected, most analysts expect the vast majority of states to accept some type of enrollment increase to leverage additional federal funds.  However, if Governor Romney is elected, many of the provisions included in Obamacare, good and bad, would likely be delayed or repealed.

The CBO estimates that the Supreme Court ruling making the Medicaid expansions voluntary will result in nearly 6 million people not being eligible for Medicaid that otherwise may have been under the law.  Those 6 million people would account for a $84 billion savings over ten years for the Federal government in not having to pay for the additional enrollee’s.  The CBO also estimates that nearly 3 million of those that will not be eligible for Medicaid in their state will be eligible for subsidies on the state-based health insurance exchanges, leaving an estimated 3 million without insurance after the ten-year period.

The report also detailed the total number of uninsured that the CBO used as a baseline; in 2022 estimates suggest 30 million people will still be uninsured in the United States, an increase from 27 million prior to the Supreme Court ruling.  If the entire bill were to be repealed the total number of uninsured would swell to 60 million without further legislative action.  Estimates suggest there are currently 53 million uninsured living in the United States today.  

As I’ve written before, the ACA is a mixed bag for orthotic and prosthetic practitioners; expanded Medicaid enrollment and other insurance access initiatives are positive for our profession as we will see an influx of additional patients. However, can the existing Medicaid system handle the influx of patients with the current number of providers and at current reimbursement levels? Only time will tell, but the Presidential election will have a dramatic impact on the pace in which these reforms move forward. OPGA Government Relations will continue to follow the implementation of Obamacare and provide updates where appropriate.

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