Medicaid expansion to cost R.I. millions more than expected

April 29--PROVIDENCE -- It looks as if providing health care for Rhode Islanders who signed up for Medicaid under Obamacare is going to cost more than expected, and not all of the added cost will be covered by federal dollars.

Officials predicted Monday that the state will pay $9.9 million more than expected for the Medicaid expansion during the fiscal year that ends June 30 and $42.5 million more during the year that begins July 1.

There appear to be two primary causes for the increase.

First, enrollments have been higher than projected.

Through April 19, 70,243 people had signed up for Medicaid under the Affordable Care Act rollout, according to state figures, with federal dollars paying for about two-thirds of those people and state and federal dollars roughly splitting the cost for the other third, because they were already eligible before Obamacare entered the picture.

Second, the state has been deferring the recertification of Medicaid enrollees until January 2015 -- allowing some people to stay on the rolls even though they may no longer be eligible, thus adding to the costs.

Elena Nicolella, the state's Medicaid director, said the federal government "very actively" encouraged states to delay re-certifications -- checking eligibility -- because states were already busy with the Obamacare rollout.

"Given the new eligibility system, it wasn't clear to us that we would have either the human or the technical resources to be able to actually conduct re-determinations," she said. "Now that we're a little bit more stable, I think we can now start to look at the technical and human resources to see if maybe we can accelerate restarting the re-determination process sooner than January 1."

The cost projections come from the first day of the latest Revenue and Caseload Estimating Conference, held each spring and fall to update revenue and cost projections that affect the state budget, which totals $8.2 billion this fiscal year. Final projections won't be unveiled until next week, but the state officials who will be putting together the budget proposal that goes before state lawmakers this spring are paying close attention to the Medicaid numbers.

"I am aware of the projections," said Rep. Raymond Gallison, D-Bristol, who chairs the House Finance Committee. "Obviously, I am very concerned about any increased pressure on an already difficult budget."

State officials had originally projected adding 51,000 people to the Medicaid rolls over 18 months. But after 7 1/2 months, the number of new enrollees exceeds that projection by nearly 20,000.

Deborah Florio, administrator of the state Center for Child and Family Health, attributed the numbers to a successful rollout of the state's health exchange.

"We were one of the very few states that had a very functional eligibility system and open portal for people to get access to health insurance, starting on October 1," she said at the revenue and caseload conference.

The Affordable Care Act expands Medicaid to adults ages 18 to 64 who have no dependent children and are at or below 133 percent of the federal poverty level. It provides full federal funding for those people through 2016 and then gradually shifts the costs to states. But it only pays about half the cost for adults who had dependent children and were already eligible, leaving the state to pay the other half.

State officials have also been wrestling with how to pay for HealthSource RI, the agency that oversees the Obamacare exchange, with has a projected $24-million annual cost.

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