New Study Says Government Should Prepare for Contingencies in Medicaid Expansion

Oct 26, 2011 6:36pm

The federal government will bear a heavier financial load when it comes to Medicaid as the number of Americans who receive aid jumps under the Obama administration’s health care plan, according to a new study.

The research, published in Health Affairs, found that the number of additional people enrolling in Medicaid may vary by more than 10 million, which would require federal government to spend an additional $58 billion on the program annually. According to the report, more than 7,000 new doctors could be needed because of the expansion.

“Our results indicate that policy makers should prepare to handle a broad range of contingencies in the Medicaid expansion under health reform,” the report concluded.

The report’s figures vary slightly from those of the Congressional Budget Office, which estimated that 16 million individuals will enroll in Medicaid in 2019, and those of the Centers for Medicare and Medicaid Services, which put the figure at 18 million.

“Research indicates that extending Medicaid coverage to uninsured people increases their access to care,” the report stated. “However, because of low provider reimbursement rates, people who shift from private coverage to Medicaid may actually experience greater difficulty finding providers willing to treat them.”

The Affordable Care Act requires states to expand Medicaid eligibility by 2014 to all Americans whose incomes are at or below 133 percent of the federal poverty line. The federal government will bankroll much of the initial costs.

Another study published in the same journal found that even without the individual mandate — perhaps the most controversial aspect of the bill — the health care law would still cover 23 million Americans that wouldn’t have had insurance without the law, and insurance premiums would rise less than projected.

If the mandate was lifted, premiums in the individual market would increase by 12.6 percent, with 7.8 million people losing coverage, according to the study.

The Democrats’ health care law has come under increased scrutiny by critics. Most Republican presidential candidates support repealing the entire law, even Mitt Romney, under whose governorship Massachusetts passed a law that became the model for the national bill.

Several programs in the Affordable Care Act have also run into hurdles. Earlier this month, the Obama administration announced it would drop the provision that would have provided long-term care insurance. The plan would’ve eased the burden on Medicaid but officials said they could not come up with a viable, financially sustainable model for it.

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