KFF Reports Significant ACA Medicaid Expansion Enrollment and Spending in Blue and Red States

Rafael Gonzalez, Esq.

Medicare & Medicaid Update Newsletter 6

Kaiser Family Foundation (KFF) recently published a new KFF analysis laying out key facts about the Affordable Care Act’s (ACA) Medicaid expansion, illustrating that both red and blue states could be affected by any potential efforts to scale back federal financing for the expansion or repeal it altogether.?As we learned through Covid, changes to ACA Medicaid expansion have a direct financial effect and impact on liability, no-fault, and workers compensation claims and litigated cases. As a result, enrollees, insurers, providers, and their legal representatives continue to watch carefully the possibility that a new administration under President-elect Trump may significantly change or repeal altogether ACA Medicaid expansion. What follows is a verbatim review of the statistics, analysis, conclusions, and findings made by KFF in its November 2024 report.

The Affordable Care Act Medicaid Expansion

With President-elect Trump returning to the White House and Republicans controlling Congress, significant changes to Medicaid are expected. One potential target for federal spending reductions is the Affordable Care Act’s (ACA) Medicaid expansion. The ACA expanded Medicaid coverage to nearly all adults with incomes up to 138% of the Federal Poverty Level ($20,783 for an individual in 2024), providing states with enhanced federal funding for their expansion populations. While the expansion was originally mandatory for all states, a US Supreme Court decision in 2012 made it optional. As of November 2024, all but 10 states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, Wyoming) have adopted the expansion.

The ACA’s Medicaid expansion has been adopted by 40 states and the District of Columbia, split nearly evenly between states that voted for President-elect Trump (21 states) and those that voted for Vice President Harris (19 states and DC) in the most recent election. Although Medicaid enrollment grew to over 94 million as a result of Covid, as of March 2024, Medicaid all states enrollment was 86.3 million (76% traditional enrollment, 24% expansion enrollment). Therefore, as of March 2024, over 21 million people were enrolled through the ACA Medicaid expansion representing nearly a quarter of enrollment across all states and about three in ten Medicaid enrollees in expansion states.?

Traditional Enrollment vs. Expansion Enrollment

Of the 86.3 million total Medicaid enrollment, in the 40 expansion states and DC, Medicaid enrollment in March 2024 was 68.3 million (69% traditional enrollment, 31% expansion enrollment). Expansion states that voted for Trump (21 states) Medicaid enrollment was 26.2 million (72% traditional enrollment, 28% expansion enrollment). Expansion states that voted for Harris (19 states and DC) Medicaid enrollment was 42.0 million (67% traditional enrollment, 33% expansion enrollment). With these many Americans on ACA Medicaid expansion, and an entire set of private health insurers contracted as managed care organizations to provide such coverage, the conversation has recently shifted from repealing the law to keeping it, but finding ways to reduce costs associated with Medicaid expansion coverage.

State Trigger Laws May Affect ACA Medicaid Expansion

Rather than repealing the ACA outright, some Republican lawmakers have proposed instead to lower the federal match rate for the expansion population from 90% to the standard Medicaid match rate, which is calculated based on a state’s per capita income and ranges from 50% to 83%. The Congressional Budget Office estimated in 2022 that reducing the match rate for the expansion group would save the federal government $631 billion over 10 years. This change would shift a substantial amount of Medicaid spending from the federal government to states. States would then need to decide whether to use its own state funds to make up for the lost federal funding or cut coverage. Many of the expansion states have "trigger" laws that could affect ACA Medicaid expansion coverage.

Trigger laws require states to automatically end Medicaid expansion coverage or require them to take actions to ensure state costs do not increase if the federal matching rate for the Medicaid expansion drops below 90% or below a specified threshold. Not all of the laws would immediately end the Medicaid expansion, but enrollees in states with trigger laws are at greater risk of losing coverage. Currently, nine states (Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah, and Virginia) have laws that require termination of the expansion if the share of federal funding drops. Laws in three additional states (Idaho, Iowa, and New Mexico) require the states to take some action to mitigate the fiscal impact of the loss of federal funds. Of the 12 states with trigger laws, eight states voted for Trump (Arizona, Arkansas, Idaho, Indiana, Iowa, Montana, ?North Carolina, and Utah) and four states voted for Harris (Illinois, New Hampshire, New Mexico, and Virginia).

Breaking Down Medicaid Spending

Medicaid spending totaled $863.9 billion for all states and $686.9 billion in the 40 states and DC that had implemented expansion in 2023 (North Carolina did not implement expansion until December 2023 and, consequently, is not counted as an expansion state during FY 2023). All states total spending was $863.9 billion (2% state spending- expansion, 18% federal spending - expansion, 29% state spending - traditional, 50% federal spending- traditional). All 40 expansion states and DC total spending was $686.9 billion (3% state spending- expansion, 23% federal spending - expansion, 29% state spending - traditional, 45% federal spending- traditional). Expansion states that voted for Trump total spending was $237.7 billion (3% state spending- expansion, 24% federal spending - expansion, 22% state spending - traditional, 51% federal spending- traditional). Expansion states that voted for Harris total spending was $449.2 Billion (3% state spending- expansion, 22% federal spending - expansion, 32% state spending - traditional, 43% federal spending- traditional).

Conclusion

Medicaid expansion has been adopted by 40 states and the District of Columbia, split nearly evenly between states that voted for Trump (21 states) and those that voted for Harris (19 states and DC). As of March 2024, over 21 million people were enrolled through the ACA Medicaid expansion representing nearly a quarter of enrollment across all states and about three in ten Medicaid enrollees in expansion states. About 4.3 million expansion enrollees live in states with some type of trigger law that would end expansion coverage or require review of expansion coverage to mitigate increases in state costs if federal funding for the expansion is reduced. In FY 2023, spending on the expansion group represented 20% of Medicaid spending across all states and over a quarter of Medicaid spending in expansion states. Because of the widespread adoption of ACA's Medicaid expansion across states, should the Trump administration reduce the amount provided to states to cover expansion costs or repeal the law, the financial and coverage impacts will be significant, felt by millions of Americans living in states that voted for President-elect Trump and also voted for Vice President Harris.

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