Five Million MORE New Medicaid Enrollees…?
At a time when state governors are writing to the federal government requesting relief from existing Medicaid mandates, and more flexibility in implementing the health care overhaul, a little-noticed portion of that law may increase the fiscal burdens placed on states beyond what the states themselves have predicted. Medicare actuary Rick Foster’s testimony from last month’s House Budget Committee hearing included this potentially significant footnote on page 10:
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, such as being under age 18, disabled, pregnant, or parents of eligible children. 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.
In other words, if the new definition of income introduced in the law excludes Social Security benefits – and the actuary believes it may – upwards of an additional 5 million early retirees (along with some Social Security disability recipients) would be forced on to the Medicaid rolls.
Officials at the Centers for Medicare and Medicaid Services have yet to opine on the official interpretation of “income” as defined by the law, and whether the scenario laid out in this footnote will come to pass. However, staff have confirmed that the Congressional Budget Office did NOT consider this possibility when scoring the bill last March – meaning that this one definitional interpretation could have a significant budgetary impact. An additional 5 million individuals added to the Medicaid rolls would increase by nearly one-third the CBO’s estimate of 16 million individuals covered under the Medicaid expansion. Moreover, because many of these enrollees would be early retirees (and therefore older and sicker than the population as a whole), CBO’s estimated $20 billion cost to states for the Medicaid expansion during years 2017-2019 – to say nothing of the costs in 2020 and beyond, when states will be paying a higher share of the Medicaid expansion – could skyrocket.
Speaker Pelosi famously said we had to pass the bill to find out what’s in it. Unfortunately, the Medicare actuary may have found yet another way in which the unpopular measure will place an impossible burden on states’ already unsustainable Medicaid programs.