Medicaid Expansion: Sizing up Coverage in States

The Supreme Court’s decision on health reform earlier this summer triggered a new round of research, discussion, and analysis among state health policy makers. The ruling allows states to opt in or out of expanding their Medicaid program up to 133 percent of the federal poverty level (FPL), because HHS can no longer impose penalties on those states that decide not to implement this expansion. Around the country, states are at work examining factors that will potentially impact their decision to expand Medicaid or not. State Refor(u)m has compiled a collection of national and state resources looking at who might be eligible and enroll, as well as analyses assessing the Medicaid expansion’s potential effects on spending, economic impact, and access to care. These materials may be helpful templates for states as they ponder their decision about whether to expand Medicaid.
Who are the newly eligible?
An analysis of health needs and demographics of the newly eligible Medicaid population in Idaho, indicated they are likely to: (1) be childless adults without regular access to care; (2) have significant and chronic health conditions; (3) have prevalent mental health issues; and (4) have incomes below 100% of the FPL. However, a study found California’s newly eligible Medicaid population is mostly healthy, even though they have limited access to care now.
A report and brief from the Urban Institute provide national and state-specific snapshots suggesting that those who could be newly eligible for Medicaid—uninsured, nonelderly adults—are a diverse group in terms of age, race, and ethnicity, with great variation among states. State officials may find these resources helpful in order to gain insight into the demographics of the newly eligible population.
How many individuals might enroll?
HHS’s ASPE recently released an issue brief focusing on Medicaid participation rates, or “take-up,” now and under the ACA. The brief discusses various methodological approaches and datasets states can employ to calculate take-up. It also notes related challenges, suggesting states use caution when comparing results from different analyses. SHADAC’s spreadsheet-based tool, as described in this presentation, is another resource states can use as they project take-up rates of newly eligible Medicaid populations. This tool allows states to conduct analyses that are timely, state-specific, and relatively inexpensive while giving them the flexibility to update baseline data or test different assumptions.
How much will the expansion cost?
The Center for Health Policy at the University of Nebraska Medical Center calculated the state cost of expansion for Nebraska would range from $385 to $455 Per Member Per Month (PMPM) from 2014 to 2020. State economists in Florida released a revised estimate of the cost to expand their Medicaid program to find the weighted PMPM for newly eligible is $315, while Arkansasestimates their PMPM cost for the newly eligible is $325.
What are the economic benefits and savings?
The report from the University of Nebraska Medical Center noted that federal spending on the state’s Medicaid expansion would generate significant economic activity, including financing over 10,000 jobs each year through 2020, and saving providers hundreds of millions of dollars related to uncompensated care. Wyoming estimates some of the newly eligible in Medicaid starting in 2014 would have otherwise been eligible for other state-funded programs such as prescription drug assistance programs or behavioral health services, resulting in reduced enrollment and cost for those programs. Finally, the Wyoming report, as well as an analysis from Arkansas, notes significant reductions in state uncompensated care costs.
In a recent blog for Health Affairs, Maryland Medicaid director Charles Milligan uses data from the Hilltop Institute’s Maryland Health Care Reform Simulation Model to discuss both the health and economic benefits for the state in his explanation for why Maryland will expand its Medicaid program. Hilltop estimates that the expansion will save $725 million by 2020 by moving people currently in a state-funded coverage program to Medicaid.
Two resources offer states a roadmap to use as they analyze Medicaid-expansion options: TheUrban Institute’s recent brief lays out the considerations that states should examine as they make this decision, including state costs, state savings, state administration, and state revenue. Additionally, a tool created by experts at the State Health Reform Assistance Network, can serve as a guide for states evaluating cost and savings factors for expanding Medicaid.
Has a government agency, university, or other organization conducted a similar analysis in your state? If so, add it to the State Refor(u)m document collection or let us know in a comment below.