PROVIDENCE – On Monday, April 30, the Rhode Island Public Expenditure Council (RIPEC) will release comments on the state’s decision to expand Medicaid to childless adults up to 138.0 percent of the federal poverty level. Medicaid expansion, a provision of the Affordable Care Act (ACA), will impact Rhode Island’s current scope of care and expenditures, although the magnitude of the impact is difficult to measure. The distribution of Medicaid expenditures will be influenced by the number and type of enrollees, as well as the distribution of enrollment. These factors make it difficult – if not impossible – to predict the precise impact of Medicaid expansion in Rhode Island. However, consideration should be given to how the state can most effectively implement the program so that the goals of expansion can be realized with a moderated budgetary impact.
Medicaid expansion is federally funded in full through 2016, and then the share drops to a floor of 90.0 percent by 2020 and thereafter. At the state level, some savings may be realized from transitioning certain Rhode Islanders from state-sponsored benefit programs to Medicaid. Additionally, Rhode Island’s Medicaid program covers certain optional populations who could be transitioned from Medicaid to the state’s health benefits exchange. Moreover, increased access to health care could generate additional economic activity in that sector, and higher numbers of insured persons could promote improved health status and worker productivity.
However, uncertainty about the number of Rhode Islanders eligible for Medicaid through the new expansion will impact out-year budgets as the state’s share of financial responsibility increases relative to federal funding. Outreach and promotion related to the implementation of the ACA could also prompt Rhode Islanders who are currently eligible, but unenrolled in Medicaid, to apply for benefits, which will have an additional budgetary impact. Lastly, the state’s decision to expand Medicaid to a population that could otherwise access the state’s exchange impacts the size of the exchange’s population and, therefore, its operational viability. Without a precise projection of eligibility and enrollment status, the net economic impact of Medicaid expansion is unknown.