- The Washington Times - Tuesday, May 13, 2014

States that opted not to expand Medicaid under Obamacare may still shell out more money for the program because the law’s publicity brought previously eligible people out of the “woodwork,” said an analysis released Tuesday.

Avalere Health, a Washington-based consultancy, said reported growth in Medicaid enrollment in these states for the first three months of the year ranged from 0.1 percent in Texas to more than 10 percent in Montana.

Nearly half the states have not opted to expand Medicaid to people making 138 percent of the federal poverty level, a key pillar of the Affordable Care Act.

In health policy circles, the emergence of previously eligible enrollees is known as the “woodwork effect.”


The influx may strain state budgets, because states must contribute to the cost of their coverage based on traditional Medicaid matching rates, according to Avalere.

“Though new eligibles are 100 percent federally funded through 2016, states only receive their standard matching rate for these previously eligible beneficiaries,” said Caroline Pearson, vice president at Avalere. “As a result, many of these non-expansion states that politically oppose the ACA are now facing unexpected financial and operational pressure due to woodwork enrollment.”

The 17 states that Avalere examined saw 550,300 new beneficiaries sign up between October and March for average of 2.8 percent enrollment growth.

The company noted that open enrollment for Medicaid can continue throughout the year, and that some states are still processing Medicaid files sent to them from the federal health exchange, so these totals may increase.