States that Opted Out of the Medicaid Expansion Have the Worst of Both Worlds

Lawmakers in Georgia and Kansas have just passed bills that will effectively prevent Medicaid from expanding in those states, according to Talking Points Memo. And yet, both states saw an increase in Medicaid enrollments this year.

Lawmakers in Georgia and Kansas have just passed bills that will effectively prevent Medicaid from expanding in those states, according to Talking Points Memo. And yet, both states saw an increase in Medicaid enrollments this year. The states, along with several others that declined the expansion, will enjoy the worst parts of Medicaid: increased costs from new enrollees who were already eligible for Medicaid and thousands of uninsured residents still in the coverage gap.

The new bills would require any Medicaid expansion to be explicitly approved by the state's (likely) Republican legislature. So even if Democrats win the governor's race this year, they won't be able to approve the expansion. That means roughly 400,000 Georgians and 77,000 Kansans will remain without Medicaid coverage for the foreseeable future. But as Bill Toland at the Pittsburgh Post-Gazette writes, the overall increase in Medicaid enrollment in states that opted out means that states like Kansas and Georgia will still end up insuring more people, but without 100 percent federal support. "It’s a positive for health overhaul advocates," Toland writes. "But for those who were against 'Obamacare' to begin with, it’s a case study in unintended consequences since new enrollees will mean new expenses for the state."

For years Obamacare critics have been worried about the "woodwork effect" — the theory that the publicity surrounding the Affordable Care Act (and the individual mandate) would drive people who were already eligible for Medicaid into the program. Those people would come out of the woodwork, costing states money — on average, the federal government foots the bill for just 60 percent of non-expansion Medicaid enrollees. "The state's complaint is, 'We said we would cover these people and now we're going to have to actually cover them and pay for them,'" Stan Dorn, a senior fellow at the Urban Institute, told The Huffington Post in 2012.

Toland notes that so far the woodwork effect isn't consistent, but states like Montana, Idaho and Florida saw 6 and 7 percent increases, according to the most recent Medicaid enrollment report. Georgia saw a 1.4 percent increase, which works out to 23,947 new enrollees between the July-September 2013 average and February 2014 numbers. Kansas saw 17,295 more enrollees, or 4.3 percent. The 477,000 who aren't getting insured this year would have cost a lot less.