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Americans for Prosperity Says ObamaCare Already Blowing Hole in State Budget as DHHS Announces 11,000 Increase in Medicaid Enrollment

July 11, 2014

MANCHESTER – Americans for Prosperity – New Hampshire (AFP-NH) today pointed to a report that New Hampshire’s Medicaid program unexpectedly expanded by 11,000 as a result of the Affordable Care Act, commonly called ObamaCare, as evidence that the law is blowing a hole in the state’s budget.  Since the new enrollees are covered under the existing Medicaid rules, they – and all future new enrollees who qualify under the existing eligibility standards – will see the cost of their care paid for by 50% state funds, a large reason for a $37 million shortfall at the Department of Health and Human Services (DHHS) budget.  This growth is frequently called the “woodwork effect.”

“ObamaCare is already blowing a giant hole in New Hampshire’s budget thanks to the woodwork effect,” said Greg Moore, AFP-NH State Director.  “Governor Hassan and DHHS badly bungled the impact that ObamaCare would have on people signing up for ‘free’ government care and now it’s likely that the taxpayers will get hit in the wallet, or other critical services, such as education or public safety will have to be cut to deal with the incompetent forecasts included in this budget.  This is one more shining example of the unintended consequences of this disastrous law.”

Moore pointed to a September 2009 study by former DHHS Commissioner John Stephen showing that ObamaCare would increase existing Medicaid enrollment by 18,000 to 23,500 through the woodwork effect.  Instead, Governor Hassan and DHHS used caseload estimates closer to the 3,600 individuals estimated by the Lewin Group in its review of Medicaid expansion in New Hampshire.

“The Governor and DHHS chose to listen to an out-of-state, insurance industry owned analysis over the work done by a real expert on New Hampshire Medicaid on ObamaCare, and they were dead wrong,” added Moore.  “The woodwork effect is already triple the estimate of the Lewin study and headed precisely where Commissioner Stephen said it would go.  The real question is what is Governor Hassan going to do to try to fix the huge mistake she made?”

AFP-NH said that the result of the woodwork effect calls into question all the other estimates included in the Lewin study, such as the notion that Medicaid expansion would cost 20,600 people their private health insurance as they are moved to Medicaid.

“Given that the Lewin Group has been off by a factor of three in terms of the woodwork effect, one has to wonder about the rest of their assumptions,” continued Moore.  “If their estimate of those dumped from private insurance onto Medicaid follows a similar path, that means that over 60,000 New Hampshire citizens will lose their high quality insurance for a second-rate Medicaid program that will result in worse health care for many.  This only underscores the extraordinarily irresponsible decision by the Governor and Legislature to pass Medicaid expansion and bring ObamaCare to New Hampshire.”

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