‘The implementation of major legislation such as the Affordable Care Act (ACA) often results in fiscal outcomes that differ significantly from prior projections. Whenever this happens it leads to many questions, much confusion, and several claims and counter-claims. Rarely is it immediately clear whether the law is working differently than envisioned, or whether the unexpected outcomes are due to inevitable projection errors having nothing to do with the law.
On rare occasion, however, a prior projection proves so far off that its significance must be noted. Two weeks ago my colleague Brian Blase uncovered such a development with respect to the ACA’s Medicaid expansion. Recall that the ACA considerably expanded Medicaid eligibility – an expansion made optional for the states in a later Supreme Court ruling. It turns out that the 2015 per-capita cost of this Medicaid expansion is a whopping 49% higher than projections made just one year before.
This disclosure can be found on page 27 of the 2015 Actuarial Report for Medicaid, released this July. Here is how the report described the issue:
“While the newly eligible adult per enrollee costs in 2014 were slightly lower than estimated in last year’s report ($5,488 compared to $5,517, or about 1 percent lower), the estimated per enrollee costs for 2015 in this year’s report are substantially greater ($6,366 compared to $4,281, or about 49 percent higher).”’ - The Soaring Costs of the ACA’s Medicaid Expansion, economics21.org, 08/01/2016
Link to the entire essay appears below:
http://www.economics21.org/html/soaring-costs-aca%E2%80%99s-medicaid-expansion-1989.html
Legislators in South Carolina are concerned about the impact of ACA upon Medicaid rolls and subsequent taxpayer money that will be required to fund such expansion of Medicaid rolls. However, the concern doesn’t fit a certain vision, one held by a particular author, hence spawning an article entitled: Insurance Rolls to Rise in State Fighting Plan.
Once past the verbal virtuosity argument, the author assumes the reader knows particular information most readers would not generally know and makes the following statement to support the article’s title:
"Even without a change in eligibility rules, enrollment is expected to grow as a result of the new health care law. The law requires most Americans to have coverage, and officials predict the mandate will prompt more of those who are eligible, but not enrolled, to sign up for Medicaid. " - Insurance Rolls to Rise in State Fighting Plan, New York Times, 09/07/2013 [link appears below]
http://www.nytimes.com/2013/09/07/us/insurance-rolls-to-rise-in-state-fighting-plan.html?_r=0
Maybe filling in the blanks that the author left out is a worthy exercise regarding South Carolina and its concern. People that are eligible for current Medicaid under current rules, where the Federal government pays 57% and the states pay 43%, of those people eligible, it is estimated nationally only 61.9% have ever applied. That is, a pool of 30% exists that could sign up under current, un-expanded Medicaid, which is known as the "woodwork effect". That is, the mandate and penalty [or tax if you prefer] of ACA will cause the 30% to pour out of the woodwork to sign up for existing Medicaid to avoid the penalty/tax.
Problem is, the state is only reimbursed 57% regarding existing Medicaid hence the woodwork effect will bust existing state Medicaid budgets which are already a major budget item (and problem) of most states.
The author, politically/purposely, does not bother to connect the dots between Medicaid expansion under ACA and existing Medicaid. How so? The argument for expanding Medicaid, was not so much an argument as it was an edict. The expansion of Medicaid was forced down states throats with the threat of pulling the existing 57% reimbursement if they did not expand Medicaid per ACA. However such requirement and threat was overturned by the Supreme Court.
South Carolina’s concern, which is a concern shared by many, many states, is as follows:
(1) the woodwork effect will flood state Medicaid rolls hence busting state Medicaid budgets,
(2) the edict of expansion, as once required, albeit reimbursed at 100%, was only reimbursed at 100% until 2020 at which time the percentage would be reassessed,
(3) hence states with Medicaid budgets that are growing by leaps and bounds before ACA did not want the woodwork effect and future reimbursement percentages, which may end up set much lower, to expand their particular Medicaid budgets to the point that they had a duel budget crisis on their hands (beyond the current state Medicaid budget problems).
However, for a moment assume the Supreme Court found the opposite way, and the woodwork effect and the expansion took effect. Then approximately 16 million people, potentially, would have been dumped onto Medicaid rolls and millions more through the woodwork effect. Exactly how many doctors currently accept the price fixing scheme of Medicaid? Exactly what quality of doctor accepts the price fixing scheme? The number of doctors accepting Medicaid is decreasing at an increasing rate.
Considering the above monumental increase in Medicaid recipients and fewer and generally reported, less qualified doctors accepting Medicaid price fixing schemes; exactly what does Wanda Widget receive when she is enrolled in Medicaid? It is the classic: "I have insurance but can't find anyplace that accepts it".
Apparently Mr. Obama and his ilk "hope" things will work out. Yes, hope springs eternal.
Laqueur: (laughing) Hope springs eternal. It's one of the most frequently quoted verses of English poetry. The poet was Alexander Pope, a decidedly cautious man. He had many enemies, and we know from his sister that he never went out into the street without his large, aggressive dog, and always with two loaded pistols in his bag.
http://www.spiegel.de/international/europe/interview-with-historian-walter-laqueur-on-the-decline-of-europe-a-912837.html
