Obamacare Is Giving Medicaid A Significant Boost — Even In The States That Didn’t Expand It

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Virginia residents assemble in favor of Medicaid expansion

A new analysis by Avalere Health finds that the Affordable Care Act’s open enrollment season is boosting Medicaid signups even in the states that have refused the health law’s optional Medicaid expansion.

“Enrollment of new Medicaid beneficiaries continues in both expansion and non-expansion states,” said Jenna Stento, senior manager at Avalere Health, in a statement. “Medicaid applications have increased 27 percent on average from October to January compared to application rates before ACA. Application rates in expansion states increased 41 percent over the same period.”

Stento told ThinkProgress that enrollments even in non-expansion states grew by 13 percent from October through January, compared to previous months.

Avalere estimates that between 700,000 and 800,000 Americans in non-expansion states who were already eligible for existing Medicaid programs, but never actually signed up for them, enrolled between October through January. This is a phenomenon that health care experts refer to as the ACA’s “woodwork effect,” wherein eligible populations come “out of the woodwork” amid persistent national and local coverage of the health law’s signup period. Some of these people may simply not have known that they previously qualified for government health care benefits, or didn’t know how to sign up.

Expansion states saw much bigger enrollment hikes, with somewhere between 1.7 million and 2.7 million signing up for Medicaid for the first time, since some people in those places became newly eligible under expansion. All told, between 2.4 million and 3.5 million of the poorest Americans started receiving Medicaid coverage for the first time during the first four months of Obamacare’s enrollment season.

Between 1.3 million and 1.7 million Americans newly signed up for Medicaid in January alone — an enrollment surge that mirrors the approximately 1.1 million people who bought private plans through Obamacare’s marketplaces in just that month.

“Medicaid enrollment grew quickly in January, now that coverage is in effect and new enrollees can seek healthcare services,” said Caroline Pearson, vice president at Avalere Health, in a statement to reporters. “Additionally, more effective processing of backlogged applications likely contributed to the increased enrollment in January.”

If the woodwork effect persists, it could have big implications for Obamacare’s long-term impact on the number of uninsured Americans. The Congressional Budget Office (CBO) expects about 31 million Americans to remain uninsured in 2024 despite a full decade of ACA implementation. The vast majority of those people will be voluntarily uninsured, including more than six million Americans who will refuse or simply won’t know how to enroll in Medicaid. Since those estimates are based on historical trends in the number of Medicaid-eligible people who never sign up, a continuing woodwork effect could drive down the 31 million number.