Dive Brief:
- A new report from the CMS Office of the Actuary finds that people recently insured through the expansion of Medicaid have turned out costlier than what the federal government originally projected.
- Newly eligible adults cost the program an average of $5,517 in 2014, while adults who were not new to the program cost an average of $4,650.
- The results are particularly surprising given that earlier projections had put the costs for this group at 1% lower than the costs for those who were previously enrolled.
Dive Insight:
CMS is attributing the higher costs of new Medicaid enrollees to this group utilizing their new coverage to address overdue medical needs. The same issue has been called out by insurers providing plans via the exchanges to people who have been long uninsured, resulting in rate increases sometimes exceeding 20%.
While the impact is alarming as newly covered healthcare consumers catch up on overdue care, experts are hopeful that the spending will level off once their conditions are addressed, and that rates will then stabilize. But that may not help mitigate political concerns that the findings raise: Some experts suggest the results may fuel arguments against expansion in states that have yet to do so.