A University of Minnesota research study has looked into the budget challenges faced by states complying with the recent health reforms. The study reveals that, irrespective of a state’s decision on Medicaid expansion, most states will receive budget shocks as reforms unfold. The study takes into account the financial ordeal experienced by Massachusetts in 2006, when it enacted a mandate to require state residents to obtain health insurance. Currently with the “individual mandate” in the federal law requiring individuals to obtain health insurance, it is clear that states might experience sudden budget shocks and anomalies which might be difficult to offset.

However, all is not lost. The study prompted the state of Minnesota to carry out a deep level analysis into the problem. The findings by Minnesota government reveal that the budget anomalies can be neutralized by taking simple measures. These simple measures include ACA benefits and some other factors in their quest to absorb possible budget shocks.

Basically, these factors are going to entice eligible people, who haven’t enrolled before, to apply for Medicaid. These factors include –

•    The federal mandate to obtain individual health insurance

•    Increased efforts by health payers to encourage people to enroll in health plans

•    Requirement to include health insurance status on tax returns

•    Simplified Medicaid application process

Other than the above ACA benefits and factors, the federal subsidies and reimbursements for state expenses are going to come in handy for controlling the cost overheads that the health reforms would bring.

Minnesota understands these factors and is expecting their Medicaid enrollment to grow by about 200,000 between 2014 and 2016. Fortunately, Minnesota has been preparing for this surge since 2010, when the Affordable Care Act was passed. Since then, Minnesota has been regularly estimating their Medicaid enrollment growth and has been including the growth in their budget calculations. This knowledge of ACA benefits and related factors puts them at an advantage in predicting budget changes and controlling anomalies. Between ACA benefits and federal reimbursements, Minnesota has all the information and resources to buttress any budget shocks that occur post implementation of health insurance marketplaces.

Other states can definitely take a page out of Minnesota’s notebook to understand how they have been successfully playing with available data and using it to beat the glaring budget errors that could send other states reeling.

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