Survey of Anticipated FY 2015 Medicaid Growth Finds More Expected in States that Approved Expansion

Enrollment in Medicaid is expected to grow an average of 13.2% nationwide through the end of the 2015 fiscal year, which ends next June in most states, according to a new survey from the Kaiser Family Foundation. To no one’s surprise, more growth is expected in states that expanded the healthcare program for low-income Americans under the Affordable Care Act (ACA).

But expansion is far from the only item on the agenda of state Medicaid officials, the survey found. Delivery system reforms are high on the radar screen with 23 states planning managed care expansions during FY 2015, up 1 state from FY 2014.

According to the Kaiser survey, Medicaid enrollment growth is expected to rise 18% in the 28 states and District of Columbia that agreed to expand enrollment criteria, with federal funds picking up all of the added cost through 2017. Medicaid spending in these states will rise 18.3%, the Kaiser survey found.

By contrast, the 23 states that did not expand enrollment criteria forecast enrollment growth of 5.2%, and Medicaid spending is expected to rise 6.5%. Authors of the survey pointed out that the rate of spending growth was slower in the expansion states, at 4.4%, than in the states that did not expand the program, where the growth rate is anticipated to be 6.8%.

The chief argument among governors and legislators who have opposed Medicaid expansion in their states is the concern about handling spending increases once the federal subsidy for expansion falls to 90%, after the core elements of the ACA have been in place for 3 years.

Kaiser’s survey was based on information gathered from state Medicaid directors, which released a report about efforts to comply with the ACA in tandem with the survey. “Whether a state elected to expand or not, Medicaid programs across the nation are being transformed with new enrollment procedures and outreach efforts combined with increased emphasis on delivery system reforms,” said Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Kaiser Commission on the Medicaid Uninsured.

In the 23 states planning managed care expansions, efforts include expanding managed care to new patient groups, new regions, and increasing the use of mandatory enrollment, among other changes. Managed care in Medicaid has had mixed success in the states in recent years, with transitions from old models to contractors accounting for many of the headaches, according to published reports.

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Issue Brief: Implementing the ACA, Medicaid Spending Enrollment Growth for FY 2014 and FY 2014