GAO Report on Medicaid Expansion & Sec. Smith’s Response

The Government Accountability Office has released the results of a survey of state budget directors opinions on PPACA’s Medicaid expansion. The report, Medicaid Expansion: States’ Implementation of the Patient Protection and Affordable Care Act, suggests the states need more guidance and highlights concerns about costs.

The GAO sent out its survey to all 50 state budget directors and 42 responded. The executive summary of the findings outlines the concerns discovered:

In terms of states’ views on the fiscal implications of the Medicaid expansion on states’ budget planning, our survey found that across fiscal years 2012 to 2020, the majority of state budget directors believe that three aspects of Medicaid expansion will contribute to costs: (1) the administration for managing Medicaid enrollment, (2) the acquisition or modification of information technology systems to support Medicaid, and (3) enrolling previously eligible but not enrolled individuals in Medicaid. At the same time, state budget directors expressed uncertainty about how other aspects of expansion will affect their budgets, such as the impact of shifting existing Medicaid enrollees into health benefit exchanges. Further, most state budget directors reported that their fiscal capacity and the state’s share of Medicaid expenditures create challenges for implementing the Medicaid expansion. A few state budget directors reported that CMS guidance was useful, while most commented that more guidance was needed to develop budget estimates in the following areas: Medicaid benefits packages (including essential and benchmark benefits), Medicaid eligibility determination, and the FMAP match for newly eligible adults. CMS officials indicated that the agency is planning to issue additional guidance or regulations at a later date in a number of areas, including clarification on eligibility groups, MAGI, and the FMAP methodology for the newly eligible population.

Wisconsin Department of Health Services Secretary Dennis G. Smith offered the following statement summarizing concerns about the perceived lack of guidance:

The GAO has confirmed the concerns we have expressed for some time—that the federal government has failed to release a credible plan for meeting the deadlines imposed, by law, to implement the Patient Protection and Affordable Care Act. States across the country are echoing these same concerns that guidance that is critical to successful implementation continues to be missing.

When only six state budget directors view the guidance released by the Centers for Medicare and Medicaid Services (CMS) to help states implement the Medicaid provisions and 30 state budget directors respond that the guidance is merely “slightly useful” or “not useful at all,” federal officials need to admit there are major problems. The expectation that states should continue to spend taxpayer dollars to implement a law without adequate or clear guidance is a prime example of government waste.

Washington needs to face the reality of the situation and be honest with the American people that the deadlines provided in the law will not be met. The GAO report is a clear warning sign that should not be ignored.