There are several aspects and policies in Obamacare that are concerning, but one part of the law that hasn’t received a lot of attention, as fiscally damaging as it will be for states, is Medicaid expansion.
This particular part of the law was originally mandated for all states, though that changed last year when the Supreme Court ceded to state objections about yet another federal unfunded liability and, in turn, required that Medicaid expansion be optional. To date, 29 states opted to expand the government-funded healthcare program for low-income citizens.
Open enrollment in Medicaid began on October 1, along with the launch of the federal and state healthcare exchanges, and it has proved to be a popular option as many who can’t afford health insurance coverage have enrolled for the program. CBS News reported last week that enrollment numbers could be problematic for Obamacare because not enough people are signing up for private health insurance (emphasis added):
CBS News has confirmed that in Washington, of the more than 35,000 people newly enrolled, 87 percent signed up for Medicaid. In Kentucky, out of 26,000 new enrollments, 82 percent are in Medicaid. And in New York, of 37,000 enrollments, Medicaid accounts for 64 percent. And there are similar stories across the country in nearly half of the states that run their own exchanges.
Medicaid experts say they’re not sure why they’re seeing the lopsided enrollment numbers, but point out it’s easier to enroll in Medicaid than private insurance.
An administration spokeswoman says coverage provided by the new law offers “a range of options so consumers can pick a plan that best meets their needs … and their budget.”
But Gail Wilensky, a former Medicaid director, said the numbers are causing concern in the insurance industry, which needs healthy adults to buy private insurance in large numbers for the system to work.
“Either the private insurance enrollments come up somewhere around the expected amount or there’s going to be a problem. … You need a volume and you need a mix of people that are healthy as well as high users in private insurance, in order to have it be sustainable,” she said.
Many have pointed to worst-case scenarios under Obamacare, the “death spiral” that could occur if not enough young healthy people don’t sign-up for coverage on the insurance exchanges to balance the costs of sick and older Americans. If that doesn’t happen, as we’ve noted before, it could lead to higher health insurance premiums for Americans, which could bring down the fiscal model of Obamacare.