CHA News Article

Report Outlines ACA Effect on Medicaid Spending, Enrollment Growth
Focus on fiscal years 2014 and 2015

The Kaiser Family Foundation (KFF) has released a report that provides an overview of Medicaid spending and enrollment growth during state fiscal years (FY) 2014 and 2015, as well as an overview of Medicaid financing. The report, titled Implementing the ACA: Medicaid Spending & Enrollment Growth for FY 2014 and FY 2015, details findings based on interviews and data provided by state Medicaid directors as part of the 14th annual survey of Medicaid directors in all 50 states and the District of Columbia. Conducted by the Kaiser Commission on Medicaid and the Uninsured with Health Management Associates, the report examines changes in overall enrollment and spending growth and compares expansion and non-expansion states.  

Key report findings include:

  • Implementing coverage expansions in the Affordable Care Act (ACA) is resulting in higher enrollment and total overall spending growth in Medicaid in FY 2014 and FY 2015. However, with full federal government financing of the Medicaid expansion population, state Medicaid spending is growing more slowly than total spending.
  • As anticipated, states implementing the Medicaid expansion are experiencing higher rates of enrollment growth and total spending growth in FY 2014 and FY 2015 due to higher coverage levels and access to enhanced federal matching funds; states not implementing the Medicaid expansion report lower enrollment growth compared to expansion states with total state spending growing at similar rates.
  • Medicaid enrollment increased on average by 8.3 percent in FY 2014 across all states, slightly less than the 8.8 percent growth states had projected on average at the beginning of the fiscal year. These slightly lower rates could be partially due to enrollment system problems, particularly with in the earlier months of the open enrollment for coverage in the marketplace.
  • All states, regardless of their decisions to implement the Medicaid expansion, attributed enrollment growth to higher take-up among those already eligible, due to referrals for the health insurance marketplaces and greater awareness of Medicaid due to outreach and publicity surrounding ACA coverage expansions. States with the largest increases in Medicaid coverage in FY 2014 were those that implemented the ACA Medicaid expansion.
  • In FY 2015, Medicaid enrollment is projected to increase across all states at a higher rate (12.2 percent) than in FY 2014 (8.3 percent), reflecting the first full year’s impact of the eligibility and enrollment changes in the ACA.
  • States that implemented the Medicaid expansion estimated the portion of their total enrollment growth that was attributable to newly eligible individuals. The median estimate was that approximately 80 percent of the observed growth in enrollment was attributable to newly eligible enrollees, and 20 percent was attributable to those already eligible but not previously enrolled.
  • Total Medicaid spending growth in FY 2014 increased across all states an average of 10.2 percent, virtually identical to the 10.3 percent originally appropriated by state legislatures.
  • In FY 2015, total Medicaid spending across all states is projected to grow an average of 14.3 percent based on adopted budgets for FY 2015.
  • For expanding states, total Medicaid spending generally will grow at a rate similar to enrollment growth; state spending for Medicaid will grow more slowly due to the higher federal match for newly eligible individuals.

The report notes, “Looking ahead, the economy, ACA implementation and other Medicaid policy changes (such as major payment and delivery system reform efforts) are expected to continue to have a significant effect on future Medicaid spending and enrollment trends.”

The full report is attached.