Obamacare’s Medicaid expansion already covering a half-million Americans

July 3, 2012

Over the past two years, five states have quietly executed the Affordable Care Act's largest coverage expansion to date, extending benefits to more than 500,000 Americans.

It's not the high risk pools, nor is it the end to pre-existing conditions for kids. Instead, these five states have increased coverage by voluntarily participating in the health law's Medicaid expansion early. That's the exact same provision a number of Republican governors are now choosing not to implement.

The health law's Medicaid expansion does not officially start until Jan. 1, 2014. It did, however, give states the option of starting enrollment even earlier. Five states --  California, Connecticut, Minnesota, New Jersey and Washington -- as well as the District of Columbia took the Obama administration up on the offer.

"These states were able to preserve and, in some cases, expand and strengthen coverage for low income adults," the Kaiser Family Foundation found in a report this past April.

All told, they expected to cover 600,000 Americans by 2014 -- about 10 times the amount covered under the health law's often-touted high risk pools (those currently have 61,619 enrollees). They have already, taken together, enrolled more than a half-million Americans.

California has been, by far, the largest state to opt-into the early Medicaid expansion. It has 7.1 million uninsured residents -- that's more people than live in Maine, New Hampshire and Rhode Island combined, and more than any other state.

Officials there knew that the insurance expansion would be a huge lift. So the state, which has been an aggressive supporter of the Affordable Care Act, decided to get a head start and sign up for the early Medicaid expansion.

California let each of its 58 counties decide how high they wanted to extend coverage. they could go all the way up to 133 percent of the Federal Poverty Line (the same level as the Affordable Care Act) or something slightly lower.

"The thinking was that we wanted to take this population, to start getting them into Medicaid and also get Medicaid ready to care for them," says Peter Harbage, a consultant who has worked with California on its Medicaid expansion. "We wanted to get them in the system now, so when we get to January 2014, it will be as seamless of a transition as possible."

The state has, so far, signed up about 400,000 new Medicaid enrollees under the new expansion. It expects to reach 500,000 residents by 2014, before other states even get started.

"This program is a tremendous support to California's economy, and people are getting care today who otherwise would not," Harbage says. "No one likes following new rules, but that's what being a partner is all about -- working together."

California isn't alone: Minnesota expects to cover 84,000 residents who earn less than $8,400 -- and, as of last April had already signed up over 51,000. Here in the District of Columbia, the Department of Health Care Finance says that about 30,000 residents have been "moved into" programs financed by the Medicaid early expansion. There's more of this happening in Connecticut, too.

Washington State has used an early Medicaid expansion to cover low income adults on its Basic Health Plan. Since Medicaid does not cover childless adults, the state has traditionally footed the program's entire bill. But when difficult budgetary times put the health plan on the chopping block, Washington joined the early Medicaid expansion and gained federal financing for the program.

It now has the federal government footing 40 percent of the bill for these adults, all of whom earn less than $14,986.

"If I had to rewrite history, I don't think we would have been able to sustain this plan without the Medicaid expansion," says Doug Porter, director of the Washington State Health Care Authority.

Granted, this isn't as good of a deal as starting the Medicaid expansion in 2014: When states start then, the federal government will cover the entire cost of newly eligible Medicaid enrollees. Until then, states only get their regular match level, which is much lower, an average of 50 percent nationally.

Still, that 50 percent match is a lot better for states than than the status quo: The Medicaid program has not traditionally covered low-income adults without children. For states like Washington, which wanted to extend coverage to its poorest adults, this was a rare opportunity where federal funds became available to do so.

Washington State can't afford to cover everyone who will gain coverage in 2014. For budgetary reasons it has capped enrollment at 30,000 -- only a fraction of the 295,662 residents expected to enroll in Medicaid two years from now.

Still, Porter describes it as a step in the right direction -- a way to set a foundation for the rest of the expansion that looming ahead. "This is a good bridge," he says. "We're preparing people who will be part of the Medicaid expansion in the future."

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Ezra Klein | July 3, 2012