Minnesota Medicaid rolls could expand rapidly with health reform law

  • Article by: ASHLEY GRIFFIN , Star Tribune
  • Updated: June 26, 2013 - 8:05 PM

Massachusetts credits an enrollment surge to the “welcome mat effect.”

Minnesota could see tens of thousands of people sign up for Medicaid starting next year if it follows a pattern detected by University of Minnesota researchers in Massachusetts after the law known as Romneycare took effect.

A “welcome mat” effect triggered by the 2006 law seemed to encourage enrollment by residents who were eligible for Medicaid but had never signed up, according to the study, which was published Monday in the influential journal “Health Affairs.”

Medicaid enrollment in Massachusetts rose from 65 percent to 95 percent of eligible low-income parents between 2005 and 2007, then subsided slightly, the authors found.

The report used the landmark Massachusetts health reform as a case study because it resembles the 2010 Affordable Care Act (ACA). Both make health insurance mandatory for most people, while offering subsidies, enrollment tools and expanded eligibility for public coverage.

“The study has implications for all states really, because the Massachusetts health reforms are so similar to the ACA reforms that will go into effect in all states early next year,” said Julie Sonier, the study’s main author and a senior research fellow at the U’s State Health Access Data Assistance Center.

Sonier said Minnesota has “a fairly sizable number of [residents] who are eligible but not enrolled in public programs — and who could potentially enroll as part of the ‘welcome mat’ effect of ACA implementation.”

Higher enrollment could also put pressure on state budgets, the study noted.

The federal government will pick up at least 90 percent of Medicaid costs for enrollees who gain eligibility because of new standards in the ACA. But states will pay their regular share of Medicaid costs for residents who were already eligible but had never enrolled. In Minnesota, the state normally picks up about 50 percent of Medicaid costs.

Medicaid, known in Minnesota as Medical Assistance, is one of the biggest items in the state budget, with state outlays last year of roughly $4 billion to cover more than 700,000 people. It provides medical insurance for the poor, elderly and disabled.

Overall, the state’s latest forecast put the cost of implementing the ACA at about $73 million in the upcoming two-year budget cycle, counting new costs as well as new federal payments.

In 2011, Minnesota opted for an early Medicaid expansion that provided health coverage to about 84,000 residents, most of them low-income or disabled. But when the ACA takes full effect in 2014, the state will expand health coverage to an additional 235,000 people — partly from expanding eligibility and partly from roping in people who were already eligible, but hadn’t enrolled.

Ashley Griffin • 612-673-4652

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