Manatt on Medicaid: The Numbers

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Even as the news media tries to untangle the latest data on Marketplace enrollment, an equally important and still-evolving story is playing out on the Medicaid side of the open enrollment equation. According to a Centers for Medicare and Medicaid Services (CMS) report released on April 4th, an additional 3 million people had signed up for Medicaid and the Children’s Health Insurance Program (CHIP) through the end of February 2014.1 These data offer our first solid view of the early impact of the Affordable Care Act (ACA) on Medicaid and CHIP. Here are Manatt’s key takeaways.

March will bring even more dramatic gains in coverage. The Medicaid and CHIP coverage gains through February 2014 are real and substantial, but are also just the beginning of the story. The 3 million figure will likely rise rapidly as final tallies come in for activity through the end of the open enrollment period for Marketplaces. Even though individuals can apply for Medicaid and CHIP at any time—there is no open enrollment period for Medicaid and CHIP—many applicants likely got caught up in the push to enroll before the Marketplace deadline. In California alone, our back-of-the-envelope calculations suggest that the surge of interest in coverage in March, as well as the clearing of a backlog of Medicaid applications could contribute to some half million or more enrollees unaccounted for in the CMS report.2,3

The “limbo problem” is masking the strong interest in Medicaid coverage. While healthcare.gov is largely on track for Marketplace enrollment, there is little doubt that problems transferring information between federal and state systems depressed Medicaid and CHIP enrollment gains in the February enrollment report. In the 36 states that rely on the Federally Facilitated Marketplace (FFM), people who submit applications through healthcare.gov but appear to be eligible for Medicaid or CHIP coverage must have their information transferred by the federal government to the state to complete enrollment. When the transfer doesn’t work, applicants end up in limbo – they have applied for coverage, but are not yet enrolled. As a result, the 3 million figure reported by CMS is artificially and temporarily low, perhaps on the order of hundreds of thousands of individuals. Ohio, for example, is a state that showed extremely low Medicaid enrollment growth in the latest CMS report, yet has indicated it has 117,000 applications for Medicaid coverage pending, likely a backlog of FFM applications as a result of transfer delays that the state is still processing.4 These Ohioans and others across the country will show up in the official “counts” as the limbo problem is resolved.

Expect steady growth as backlogs are cleared. The strong interest in coverage has resulted in a surge of Medicaid and CHIP applications, making it hard for state eligibility workers to keep up, especially while acclimating to new eligibility systems. At the same time, states that rely on the FFM are facing a large influx of applications from the federal government. The result often is a striking mismatch between the story told by the official Medicaid enrollment data and the reality on the ground. In Illinois, for example, the data in the CMS report show an actual decline in Medicaid coverage in recent months of 112,000. Yet, based on the applications it already has in hand, Illinois expects at least 430,000 new people to be enrolled in Medicaid by June 30, a reality that is not yet reflected in the CMS report.5

Look for states with Medicaid expansions and fast-track enrollment strategies to jump further ahead. As the CMS report makes clear, states with Medicaid expansions are seeing more robust enrollment gains than their counterparts—the rate of growth in expansion states was 8.3 percent compared to 1.6 percent in non-expansion states.6 We will have to wait for more detailed data from CMS before knowing how much of this is due to enrollment of the newly eligible versus those who were already eligible but not enrolled prior to the Medicaid expansion (the “welcome mat” or “woodwork” effect). In the meantime, it is clear that as states such as Michigan and New Hampshire roll out their recent Medicaid expansions, it will drive further Medicaid enrollment gains in 2014. It also is clear that states using the flexibility provided by CMS to rely on SNAP data to sign people up for Medicaid are seeing robust results. The five states that used these fast-track enrollment strategies—Arkansas, California, Illinois, Oregon and West Virginia—attributed nearly a half million sign-ups to these tools. We expect a handful of states to follow suit, further driving up Medicaid and CHIP enrollment numbers.

In sum, the news of 3 million more people enrolling in Medicaid is a story that is just beginning to unfold. Look for a major jump in the 3 million when final tallies come in for activity through the end of the open enrollment period, as systems issues are resolved, and as additional states move forward with expanded Medicaid and targeted enrollment strategies in the weeks and months to come. All in all, we predict these numbers could increase by 50% or more by the time the snow finally melts and the summer months are upon us.

How did CMS calculate 3 million?

CMS requested states report enrollment from July through September 2013 to construct monthly average Medicaid and CHIP enrollment figures prior to major ACA policy changes, most significantly the expansion of Medicaid coverage to low-income adults effective January 2014. Forty-six states (including the District of Columbia) reported a total of 58 million individuals enrolled in Medicaid and CHIP over the baseline period and those same forty-six states reported a total of 61 million individuals enrolled at the end of February.

1. The Centers for Medicare and Medicaid Services released the fifth in a series of reports capturing Medicaid and CHIP eligibility activity since October 2013 and, for the first time, revealed Medicaid and CHIP enrollment figures. Accessible at http://www.medicaid.gov/AffordableCareAct/Medicaid-Moving-Forward-2014/Downloads/February-2014-Enrollment-Report.pdf

2. According to state data, California saw 1.9 million enrolled in Medi-Cal between October 2013 and March 2014. Accessible at http://4.bp.blogspot.com/-wpZa0JOivdI/Uz2dGqrL7tI/AAAAAAAAAXg/Gt4mh9Oo6p4/s1600/img01.jpg

3. Accessible at http://articles.latimes.com/2014/apr/05/local/la-me-obamacare-medi-cal-backlog-20140406#ixzz2yCQpfC8I

4. Accessible at http://www.healthtransformation.ohio.gov/LinkClick.aspx?fileticket=Gau7Ew2fMWc%3d&tabid=117

5. Illinois Department of Healthcare and Family Services

6. See footnote 1

 

 

Topics:  Affordable Care Act, CHIP, CMS, Healthcare, Medicaid

Published In: Health Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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