HealthReformGPS is made possible through generous financial support from the RCHN Community Health Foundation. Visit them at

GAO releases Medicaid expansion report

Posted on August 1, 2012 | No Comments

PDF Version
Editor's Comment
Key Developments

The Government Accountability Office (GAO) recently released a report on Medicaid expansion under the Affordable Care Act (ACA). The report does not take into account the June 28th United States Supreme Court decision.

Congress asked the GAO to report on the actions states are taking to implement the Medicaid expansion. This report addresses the following questions:

1. What are states’ responsibilities for implementing the Medicaid expansion provisions under ACA?

2. What actions have selected states taken to prepare for the Medicaid expansion provisions of ACA and what challenges have they encountered?

3. What are states’ views on the fiscal implications of the Medicaid expansion on state budget planning?

The six selected states included in the GAO study (Colorado, Georgia, Iowa, Minnesota, New York, and Virginia) are taking some steps to prepare for the Medicaid expansion, including assessing changes that need to be made to their existing eligibility levels and eligibility determination policies. In an effort to streamline their eligibility and enrollment processes, the six states also are taking steps to upgrade or replace their Medicaid information technology systems and have submitted applications to CMS for enhanced federal funding for this purpose. In interviews, officials noted that the enhanced funding provides the states with an opportunity to update outdated eligibility and enrollment systems. At the same time, state officials reported challenges to implementing ACA’s Medicaid expansion requirements, including the need for additional federal regulations and guidance in a number of areas.

In terms of states’ views on the fiscal implications of the Medicaid expansion on states’ budget planning, the survey found that across fiscal years 2012 to 2020, the majority of state budget directors believe that three aspects of Medicaid expansion will contribute to costs: (1) the administration for managing Medicaid enrollment, (2) the acquisition or modification of information technology systems to support Medicaid, and (3) enrolling previously eligible but not enrolled individuals in Medicaid.

No Comments

Public comments are closed.

A report released by the Robert Wood Johnson Foundation (RWJF) examines Medicaid expansion in eight states- Arkansas, Colorado, Kentucky, Michigan, New Mexico, Oregon, Washington, and West Virginia. Researchers found that these states are seeing large budget savings without reducing services. Savings and revenues by the end of 2015 are expected to exceed $1.8 billion across all eight states, and in Arkansas and Kentucky these savings and revenue gains are expected to offset expansion costs through 2021. The report suggests that these savings come from less state spending on programs for the uninsured, more federal dollars for newly eligible enrollees, and higher revenue from existing insurer and provider taxes. The authors contend that these findings will apply to every state that has expanded Medicaid.
A study by the Urban Institute finds that the Affordable Care Act (ACA) may reduce, but not eliminate health care coverage disparities. The report projects that under the ACA uninsurance rates will fall for each racial/ethnic group, narrowing coverage differences between whites and each minority group, except for blacks. If, however, all states were to expand their Medicaid programs, researchers predict that uninsurance rates would fall further for all racial/ethnic groups, with blacks experiencing a marked reduction.
A new study by the Urban Institute funded by the Robert Wood Johnson Foundation finds that two-thirds of the nation’s remaining uninsured adults have incomes at or below 138 percent of the federal poverty level (FPL). While this is the target population of the Affordable Care Act’s (ACA) Medicaid expansion, 40 percent of the uninsured live in states that chose not to expand Medicaid. The study found that affordability was the main reason people did not get health insurance, yet many uninsured individuals had limited awareness of potential financial help available to them.
A new Government Accountability Office (GAO) report finds that eight states spent at least $10,500 per Medicaid recipient in 2008, while the majority of states were clustered in the $6,000-$8,000 range, per enrollee. For Fiscal Year (FY) 2013 Medicaid spending is estimated at $267 billion, a figure that is expected to nearly double by FY 2024. The GAO’s report assessed why there is so much variation in per-enrollee spending across states and how states account for those differences when setting Medicaid managed care rates.
A new study issued by the Commonwealth Fund found that 42% of those currently uninsured residing in states not expanding Medicaid will not have access to affordable health coverage. The study, In States' Hands: How the Decision to Expand Medicaid Will Affect the Most Financially Vulnerable Americans, stated that the Supreme Court's 2012 decision to make Medicaid expansion under the Affordable Care Act (ACA) optional for states will be particularly detrimental to those with the lowest incomes that do not meet Medicaid eligibility under conventional standards. Since about half of the states are not expanding Medicaid, about 2 of every 5 uninsured individuals will not be able to capitalize upon the expanded coverage provisions of the ACA.
The Congressional Research Service (CRS) published a report analyzing the similarities and differences between Medicaid and insurance plans offered on state insurance Exchanges. Under the Affordable Care Act (ACA), the Medicaid expansion and premium subsidies offered through the Exchanges were intended to work in concert by providing insurance coverage to Americans with the lowest incomes. The Supreme Court ruling rendering Medicaid expansion optional threw a serious wrench in this core goal, leaving millions of Americans who would have received coverage through Medicaid expansion not only ineligible for the program, but also outside of the income bracket to qualify for Exchange subsidies. This report, Comparing Medicaid and Exchanges: Benefits and Costs for Individuals and Families, speaks to the complexities and issues that arise when attempting to compare benefits and costs offered through Medicaid and Exchange plans. Some of the most marked differences addressed include: variation in benefits covered by Medicaid and qualified health plans amongst states, cost-sharing requirements, and coverage issues concerning maintenance of effort and churning.
An article published in the June issue of Health Affairs indicated that states opting out of Medicaid expansion would prohibit 3.6 million Americans from gaining insurance and would miss out on $8.4 billion in federal payments. The analysis, performed by RAND, evaluated 14 states that had originally denied the opportunity to expand their Medicaid-eligible population to 138% of the federal poverty level. RAND determined that forgoing expansion will increase the cost of caring for the uninsured individuals in these states by $1 billion in 2016. Irrespective of the financial implications, the RAND study also found that not expanding Medicaid may result an additional 19,000 deaths per year in the 14 states studies.
A new study released by the Robert Wood Johnson Foundation and Urban Institute describes the financial burden of medical spending on a state-by-state basis. Using this information, the study hones in on the number of individuals per state that experience high burdens from medical spending, yet currently are not eligible for Medicaid. The study found that Medicaid expansion, under the Affordable Care Act (ACA), has the potential to mitigate the financial burden from medical spending for several vulnerable populations in various regions across the country.
As full implementation is poised to begin, GPS staff have prepared a map designed to provide a status update in one visual. The map blends Medicaid and Marketplace information to present a more comprehensive view of states’ role in implementation, as the extent of their engagement in two central elements of the law, the Medicaid expansion and the establishment of Marketplaces. The 16 states in blue are...
The Centers for Medicare and Medicaid Services (CMS) released a letter to state health officials and Medicaid Directors regarding enrollment of uninsured individuals into Medicaid and CHIP. With the looming enactment of the Affordable Care Act's (ACA) provision on Medicaid expansion, CMS intends to assist states by providing optional tools that will aid in their transition to the new eligibility and enrollment models. The letter specifically addresses and provides guidance on these five enrollment strategies:
  • Implementing the early adoption of Modified Adjusted Gross Income (MAGI)-based rules;
  • Extending the Medicaid renewal period so renewals that would otherwise occur during the first quarter of calendar year 2014 will occur later;
  • Enrolling individuals into Medicaid based upon Supplemental Nutrition Assistance Program (SNAP) eligibility;
  • Enrolling parents into Medicaid based upon children's income eligibility; and
  • Adopting 12-month continued eligibility for parents and other adults.
CMS purports that states choosing to utilize one of these outlined approaches will be met with a streamlined review and approval process.