Why Freezing Medicaid Enrollment Works

Many states are finding that the Medicaid rolls are larger — and more expensive — than expected. Jonathan Ingram, Nic Horton and Josh Archambault of the Foundation for Government Accountability offer a solution: Medicaid enrollment freezes. An enrollment freeze prevents new enrollment in Medicaid, while allowing those already in the program to stay. States that have implemented freezes have seen large drops in their Medicaid rolls.

Why do enrollment freezes work? Because poverty is not permanent:

– The median amount of time that a person spends in poverty is just 6.6 months.
– Almost 75 percent of individuals in poverty will leave poverty within a year.

After expanding its Medicaid program in 2000, Arizona’s Medicaid costs exploded to levels four times what the state had expected. To deal with the problem, Arizona did a Medicaid freeze in 2011. What happened?

– During the first year of the freeze, Medicaid enrollment dropped by 5.5 percent monthly.
– Twenty-nine percent of people in the program — over 65,000 adults — had left within the first six months.
– At the end of the first year, 115,000 adults had left Medicaid.
– By the end of the second year, 155,000 adults had left the Medicaid program.

Maine did a similar enrollment freeze in 2005. Within 16 months, enrollment in the state’s Medicaid program had dropped by 57 percent.

These freezes could also have a significant impact on the economy. When Tennessee ended an expansion of its Medicaid program in 2005 and removed 170,000 adults from the program, the disenrolled adults began searching for jobs. Sixty-three percent of them increased their employment, and 90 percent of those began receiving employer-sponsored health insurance.

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