* WellPoint expects significant Medicaid growth in 2014
* Obama law to cover most near poverty line next January
* Poll shows voters backing expansion in seven states
By Caroline Humer and David Morgan
Jan 23 A top U.S. insurance industry executive
on Wednesday predicted that most states will agree to expand
their Medicaid programs under President Barack Obama's
healthcare reform law, despite opposition from more than a dozen
"In the long run, the economic benefits to the states will
be such that most states will eventually expand Medicaid," said
Richard Zoretic, the executive vice president who oversees
Medicaid programs at WellPoint Inc., the-second largest
U.S. health insurer.
"We'll see significant growth not just in 2014, but beyond
in this space," he said during a conference call with analysts
to discuss the company's fourth-quarter earnings.
His prediction comes at a time when about 15 state governors
are weighing whether to participate in the dramatic expansion of
the Medicaid program for the poor advocated by the Patient
Protection and Affordable Care Act.
At least 22 governors, including four Republicans, already
have decided to back the plan, which would commit the current
uneven patchwork of state-run Medicaid programs to a federal
standard providing health coverage to most low-income Americans
earning up to 133 percent of the federal poverty level, or about
$24,000 for a family of three. Thirteen Republican state
governors oppose the plan as a costly and unnecessary government
But a 50-state survey released on Wednesday by the
nonpartisan Kaiser Family Foundation showed wide gaps in the
current Medicaid program, which is expected to spend more than
$490 billion this year.
Eligibility for parents is limited on average to those
earning no more than 61 percent of the federal poverty line,
which equals about $19,000 a year for a family of three.
Thirty-three states required parents to earn less than the
poverty rate, with 16 restricting eligibility to less than 50
Nine states extended full Medicaid coverage to adults
without dependent children, while three states, Hawaii, Illinois
and Minnesota, reduced eligibility for adults where it was not
required by federal rules.
Medicaid, which is run by states with federal funding and
oversight, represents a major budget expenditure for state
governments. Many have sought to curtail program expenses in
recent years because of fiscal constraints imposed by the
recession and a slow economic recovery.
Benefits and eligibility can vary widely from state to
state, with many limiting Medicaid coverage to defined groups,
including children and their parents, pregnant women, the very
old and people suffering from certain health conditions.
MOUNTING PUBLIC PRESSURE?
Officials in states that have not opted to join the
expansion face intensive pressure from the healthcare industry,
which stands to gain millions of new customers. Medicaid
currently serves about 60 million people and those ranks could
swell by 16 million if all U.S. states participate in the
WellPoint has made a more than $4 billion bet on the
expansion of Medicaid with its 2012 purchase of smaller health
insurer Amerigroup. It now offers Medicaid plans in 20 states
and expects to gain marketshare where Medicaid expands.
State officials could also face mounting public pressure to
participate in the expansion, according to a poll released on
Tuesday by the American Cancer Society, which favors expansion.
It found that large majorities of registered voters in seven
states favor accepting the federal subsidies that would fund
expansion. Five of the seven states - Florida, Kentucky, Iowa,
Michigan and New Jersey - are undecided. The two others are
Texas, which opposes expansion, and New Mexico, whose Republican
governor supports it.
The Obama administration's chief officer for Medicaid said
the program has made years of progress in enrollment and will
become more accessible next year under the reform law, even in
states that do not participate in the coming expansion.
"As enrollment barriers are eliminated, participation rates
of eligible people increases and the uninsured rate for
individuals declines," Medicaid director Cindy Mann said at an
event marking the Kaiser survey's release.
Even as state Medicaid programs fail to reach large numbers
of the country's poor, Kaiser reported that nearly all states
are pressing forward with federally funded technological
improvements to streamline their Medicaid enrollment systems and
provide online access under the healthcare law.
As of Jan. 1, 37 states had an online application for
Medicaid or the federal program for children, up four from a
year earlier. Twenty-eight states now allow families to renew
their benefits online, an increase of eight since the start of
"On balance, states made more positive improvements than
adverse changes (in 2012), often capitalizing on technology to
gain administrative efficiencies and reduce paperwork," the
Kaiser survey said.