Expanded Medicaid Enrollment Under ACA Likely to Increase Taxes

By:  Raven Clabough
05/29/2014
       
Expanded Medicaid Enrollment Under ACA Likely to Increase Taxes

While Americans are already experiencing a rise in their health insurance premiums because of ObamaCare, it seems taxpayers may also see an increase in their taxes as a result of the costliness of Medicaid — also attributable to the new healthcare law.

State Medicaid budgets are being strained because of increased Medicaid enrollment, seen in more than half the states across the country regardless of whether they elected to expand Medicaid eligibility.

Seventeen states that elected not to expand eligibility for Medicaid under the new healthcare law still managed to end up with more program beneficiaries: over 550,000 people who signed up for Medicaid coverage between October and March.

Georgia is one of the states that opted not to expand Medicaid coverage but witnessed an additional 99,000 new Medicaid enrollees, an increase of 5.8 percent. Likewise, 58,000 more residents in North Carolina enrolled, and South Carolina and Tennessee each saw 54,000 new Medicaid beneficiaries.

Many experts believe the increases resulted from the hoopla surrounding the Affordable Care Act. Devon Herrick, senior policy analyst at the National Center for Policy Analysis, explains it is the “woodwork effect.” Before the implementation of the healthcare law, there were approximately 50 million uninsured Americans, 12 million of whom were eligible for Medicaid, but unenrolled.

“It was a pain to enroll, and if they got sick, they could always enroll after the fact,” Herrick explains. “Now, states are required to have a one-stop shop to screen you for Medicaid and subsidies. And under the individual mandate, they have to enroll.”

The individual mandate requires that all Americans have health insurance or face a penalty of either $95 or one percent of their annual income.

And Herrick indicates that Medicaid enrollees who are not part of the expansion are being covered only by federal reimbursements of up to 60 percent, which is costing states significantly more than expected.

But the increased enrollment was not limited merely to those that did not expand Medicaid eligibility.

Fox News writes:

Medicaid enrollment has increased due to the expansion of the program and the individual mandate, and the growth is weighing on states’ budgets.

The ACA allows states to expand Medicaid eligibility to those who are making 138 percent of the federal poverty level, which is about $16,100 annually. The federal government picks up the cost through 2016, and then it drops down to 90 percent in the following years. About half of states nationwide have expanded their Medicaid programs.

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