Tax Law

State Net Capitol Journal – November 4, 2013; Budget & Taxes: Medicaid Outpaces Private Insurance In ACA's Opening Weeks

Budget & Taxes

MEDICAID OUTPACES PRIVATE INSURANCE IN ACA'S OPENING WEEKS: In May the Congressional Budget Office projected that as a result of the Affordable Care Act, nine million more Americans would enroll in Medicaid in 2014 and seven million would sign up for private health coverage through new health-insurance exchanges. In the initial weeks of the health reform law's rollout, Medicaid enrollments were roughly on pace with that estimate, but enrollments in private insurance were well off-track.

Eighty-seven percent of the 35,528 people who enrolled in new insurance plans in the state of Washington between Oct. 1 and Oct. 21 joined Medicaid plans rather than private insurance plans, according to state figures. Eighty-two percent of Kentuckians who had newly enrolled in insurance plans by Oct. 24 signed up for Medicaid instead of private insurance. And 64 percent of New York's 37,030 new enrollees chose Medicaid.

One of the main reasons for the disparity between Medicaid and private insurance enrollments so far is that there were major glitches with the launch of, the federal website that serves the residents of the 36 states that chose not to run their own insurance exchanges.

Another reason is that enrolling in Medicaid is often simpler than signing up for private insurance. Medicaid enrollees typically don't have to make as many decisions about deductibles, prescription-drug plans or physician networks, for instance.

"There are no comparisons between those processes," said Kip Piper, a Medicare and Medicaid industry consultant based in Washington. "It's not like comparing apples to apples or even apples to oranges. It's apples to poodles."

Furthermore, some states like California, Maryland and Washington have initiated aggressive outreach efforts to get people into Medicaid, including contacting individuals already enrolled in other government programs like food stamps.

"When you actively go out and aggressively target people, they sign up," said Matt Salo, executive director of the National Association of Medicaid Directors. (WALL STREET JOURNAL)

US PROMOTING BRAND TO WORLD: This fall ads, videos and a display window promoting the beaches of South Carolina appeared at London's famed Harrods department store. And in the spring, ads showcasing Louisiana graced London's red double-decker buses and "tube" stations. Both campaigns were part of a federal initiative signed into law by President Obama in 2010 "to promote the United States to world travelers."

The program, called Brand USA, is funded by the private sector, primarily the tourism industry, with the federal government providing matching funds of up to $100 million per year from a $10 fee paid by international travelers who visit the United States.

Last year, in its first full year of operation, Brand USA received $60 million in private funding, which more than doubled to $130 million this year. And the program appears to be creating satisfied customers.

Louisiana Lt. Gov. Jay Dardenne (R) said Brand USA has helped his state shatter tourism records, including those of the years prior to Hurricane Katrina.

"We're very pleased," he said. (STATELINE.ORG)

BUDGETS IN BRIEF: MASSACHUSETTS shoppers began paying the state's 6.25 percent sales tax on items they purchase from Amazon this month. The state expects the tax to generate $36.7 million before the end of the fiscal year on June 30 (BOSTON GLOBE). • The ILLINOIS Supreme Court invalidated the state's two-year-old law imposing taxes on certain Internet sales. The justices ruled 6-1 that the so-called "Amazon tax" violates a pre-emptive federal decree barring "discriminatory taxes on electronic commerce" (ASSOCIATED PRESS, ABC7CHICAGO.COM). • MISSOURI Gov. Jay Nixon (D) reversed course on his plan to scale back the state's food stamp program, a move that could have eliminated benefits for 58,000 residents. The governor said the uncertainty in Congress that had put federal funding for the program in jeopardy appears to have passed (SAINT LOUIS POST-DISPATCH). • Laws in several states, including OREGON, may allow federal workers who collected unemployment insurance during the government shutdown to keep those benefits as well as the back pay they'll receive, according to the Labor Department (USA TODAY).

- Compiled by KOREY CLARK

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