"Woodwork Effect" Increases Some States' Medicaid Enrollee Numbers
May 14, 2014
Katie Sullivan, MA
States that resisted expanding their Medicaid programs still saw an increase in new enrollees through the end of March. According to a market analysis from Avalare Health, a minimum of 550,300 new people signed up for Medicaid benefits in 17 out of the 26 states that refused to accept federal health reform funding. Had those states chosen to expand their Medicaid programs under the Affordable Care Act (ACA), many would have benefited from the additional funding.

“I don’t think a lot of these states anticipated the kind of enrollment they would be getting,” said Avalere CEO Dan Mendelson. “The states are going to have to figure out a way to pay for the increase.”

Georgia enrolled 99,000 new Medicaid beneficiaries, while North Carolina saw 58,000 new consumers sign up. Virginia saw a 3.6% increase, with 37,000 new enrollees. The drastic increases in enrollment show that these particular states are experiencing the most extreme outcomes of the “woodwork effect.” While the federal government pays the full cost for enrollees in ACA-expanded Medicaid programs through 2016, average woodwork enrollees are reimbursed under the traditional Medicare payment model, which covers only 57% of costs. States must pick up the rest of the tab.

“Though new eligibles are 100% federally funded through 2016, states only receive their standard matching rate for these previously eligible beneficiaries,” said Caroline Pearson, vice president at Avalere Health. “As a result, many of these nonexpansion states that politically oppose the ACA are now facing unexpected financial and operational pressure due to woodwork enrollment.”

Around the Web

Medicaid Rolls Grow in States Resisting Health Law [The Washington Post]

In Red States, Obamacare Outreach Boosts Medicaid Enrollment [Forbes]