Medicaid Enrollment Expected To Rise In 2020, 21

William TierneyUncategorized

Since the General Assembly approved Medicaid expansion in 2018, total enrollment and savings have been on the rise.

Mike Tweedy, a legislative fiscal analyst for the Senate Finance Committee, said during the committee’s annual meeting at Hotel Madison and Shenandoah Valley Conference Center on Friday that the average growth for Medicaid enrollment in fiscal year 2019 grew by 8.8% since the expansion took place.

Prior to Medicaid expansion, the average enrollment was at 3.8%, Tweedy said.

“For FY 2019, the total enrollment for Medicaid was over 1.1 million,” Tweedy said. “The program over its life has just grown dramatically.”

Despite enrollment rising to 198,653 in January 2019, it fell short of the post-expansion projections of 256,120.

Enrollment continued to be under projections through November, but is expected to reach 368,406 by July 2020 and 386,330 by July 2021, Tweedy said.

With Medicaid being offered to more people due to the expansion, the cost of Medicaid has also increased.

“Enrollment is the primary cost driver of Medicaid,” Tweedy said.

As the finance committee works with Gov. Ralph Northam to develop the 2020-22 biennium budget, Tweedy said the forecast for Medicaid funding for the budget would be $675 million compared to an original forecast requiring $1.1 billion in general funds.

“In FY 2019, Medicaid spending was lower, resulting in $55.1 million of state funds remaining,” Tweedy said.

Due to Medicaid expansion savings, the FY 20 growth is lower, reducing the general funds by $212 million from the current appropriation.

“Due to savings occurring, it reduced budgeting there in the forecast part,” Tweedy said. “That means that since it is overfunded, it essentially pre-paid part of the forecast.”

By FY 21, projections show $174 million in general funds will be needed, with $501 million expected for FY 22.

Tweedy told committee members that there were three sources contributing to general fund savings due to Medicaid expansion: Managed care, fee-for-service and pharmacy rebates.

Managed-care costs attributed 52% of savings due to the shifting of disabled and low-income individuals from base Medicaid to Medicaid expansion. Pharmacy rebates were estimated to bring in $33 million in general fund savings, while fee-for-service was higher than expected resulting in a 32% savings.

Tweedy said savings from the Department of Corrections from inpatient hospital costs were still being assessed as only 7,000 of 30,000 inmates had enrolled in Medicaid.

When asked why the number of inmates enrolled in Medicaid was low, Tweedy said it was due to the enrollment process taking time and some inmates refusing to be enrolled.

Steve Herrick, health services director for the Virginia Department of Corrections, told committee members during a separate presentation that while Medicaid expansion is saving the state money, funding for the DOC to provide health care to inmates is expected to increase.

“Mental health is not covered by Medicaid,” Herrick said. “But mental health and dental is provided through our health care.”

Health care represents close to 20% of the DOC budget, which was an increase to the 15% in 2007, according to Tweedy. The need to supply inmate health care resulted in making up close to 57% of funding requested in Public Safety and Homeland Security for the biennium budget.

Herrick said funding would be used for a pilot project to pay Medicare rates, providing more treatment for inmates with chronic conditions at the University of Virginia and Virginia Commonwealth University and implementing electronic health records.

Contact Jessica Wetzler at 574-6279 or Follow Jessica on Twitter @wetzler_jessica