In early Obamacare sign-ups, Medicaid favored over private insurers

WASHINGTON - The first month of the new health law's rollout reveals an unexpected pattern in several states: a crush of people applying for an expansion of Medicaid and a trickle of sign-ups for private insurance.

The imbalance - in some places nine of 10 enrollees are in Medicaid - is surprising some. The Affordable Care Act, which expanded Medicaid to cover millions of the poorest Americans who could not otherwise afford coverage, envisions a more even split with a robust private market.

"When we first saw the numbers, everyone's eyes kind of bugged out," said Matt Salo, who runs the National Association of Medicaid Directors. "Of the people walking through the door, 90 percent are on Medicaid. We're thinking, What planet is this happening on?"

The yawning gap is handing Republicans yet another line of criticism against President Obama's health overhaul - that the law is primarily becoming an expansion of a costly entitlement program.

Supporters caution against reading too much into early numbers. Some states that set up their own exchanges are suffering website glitches similar to that of the national system, and that is delaying enrollments in private plans.

But if this continues, experts say, it could prove costly for states that will have to help pay for some of these new Medicaid enrollees. It would further widen disparities between states that opted to expand the entitlement program - among them New Jersey - and those that have not - including, so far, Pennsylvania.

Low enrollment in private insurance, meanwhile, could increase premiums as it would likely indicate that only sick people, who really need coverage, were signing up.

Yet given that many of the health law's changes to the insurance market are unprecedented, it's difficult to predict how this disparity will play out.

The lopsided enrollment comes at an inopportune moment for the Obama administration, with Republicans widening their attacks beyond the botched launch of HealthCare.gov.

The Affordable Care Act initially required all states to expand Medicaid to cover everyone earning less than 138 percent of the federal poverty line (about $15,000 for an individual or $32,500 for a family of four). The Supreme Court found that unconstitutional in its 2012 ruling on the health law, handing states the decision over whether to expand.

Of the 26 states that have opted for the Medicaid expansion so far, 22 are led by Democratic governors and four by Republicans.

Forecasters projected this summer that nine million people would sign up for Medicaid in 2014, slightly more than the seven million shoppers who would buy private insurance plans.

Of states so far reporting enrollment data, most show a much wider gap.

Some of the Medicaid surge may have to do with the relative ease of finding potential enrollees who already use public programs.

Medicaid also does not charge monthly premiums, which makes it an easier sell. And while shoppers have struggled to buy coverage on HealthCare.gov, some Medicaid enrollees have smoother experiences.

The federal government foots the entire bill for Medicaid enrollees newly eligible under the health law.

States do have to help pay for their residents who were already eligible prior to the health law but are just signing up.