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ObamaCare Spurs Medicaid Sign-Ups Across The Country

Twenty-five states rejected ObamaCare's Medicaid expansion. But they accounted for one-fourth of the initial enrollees in the health care program for the poor. That signals that states may bear higher costs than expected.

New Medicaid enrollment totaled 396,261 from Oct. 1 to Nov. 2. Of that, 102,277, or 26%, came in states that chose not to increase the programs' eligibility.

Medicaid sign-ups in those 25 states topped the number of people selecting an ObamaCareplan in all 36 states using the federal Healthcare.gov by nearly 4 to 1.

All the attention devoted to the ObamaCare launch spurred many already-eligible people to enroll. This was expected, at least to some extent.

Households earning less than 100% of the poverty level in non-expansion states aren't eligible for either Medicaid or subsidies that could help them buy private coverage via Healthcare.gov.

But some people are finding out that they're already eligible for Medicaid, or perhaps that their children are eligible for the federal Children's Health Insurance Program (CHIP).

A similar thing happened in Massachusetts under "RomneyCare." Medicaid participation among eligible low-income parents jumped from about 65% to 95% from 2005 to 2007.

Still, some officials in non-expansion states may have been surprised by how many already-eligible have signed up.

"Based on early reports, it's a little higher than estimated, and talking to other states it's a little higher than estimated," Tennessee Medicaid Director Darin Gordon told an industry conference.

That matters, because it means states will have to pick up a substantial share of the tab.

The federal government covers an average of 57% of Medicaid costs, but the match ranges from 50% to 75% depending on the state. (The federal CHIP share is 15 percentage points higher.) But for those gaining eligibility for Medicaid due to ObamaCare, Washington will cover 100% of the cost through 2016, falling to 90% in 2020 and beyond.

The Congressional Budget Office has expected Medicaid enrollment to initially outpace exchange enrollment — 9 million vs. 7 million in 2014. People are more willing to commit to plans that are free of charge.

But first-month enrollment even in state-operated exchanges was tilted far more toward Medicaid: 213,000 to 79,000.

Since then, Medicaid sign-ups have continued at a brisk pace. California, which did expand its Medicaid program, said 140,000 had been cleared for Medicaid as of Nov. 19 vs. 80,000 on Nov. 2.

Total new Medicaid enrollment has now topped 700,000, according to the latest available federal and state data.

Some GOP governors rejecting the expansion warned that the federal government could renege on its cost-sharing.

But opt-out states face a more immediate risk. ObamaCare's in surance expansions were paid for in part by cutting payments to hospitals that treat a high percentage of patients whose care goes at least partly uncompensated.

ObamaCare gradually halves Medicaid payments to so-called disproportionate share hospitals (DSH). Medicare's DSH payments will be cut by up to 75%.

The strain on hospitals in states not expanding Medicaid is spurring efforts to seek a third way. Arkansas Gov. Mike Beebe, a Democrat, won support from the GOP legislature and a waiver from Washington to cover new and existing Medicaid enrollees via private insurance.