Since the Affordable Care Act’s passage, 31 states and the District of Columbia have adopted state Medicaid expansion. In the 19 states that did not expand their programs, Medicaid eligibility is typically limited to families with income levels at 44 percent of the poverty level, leaving childless adults uncovered.
The result, says the Kaiser Family Foundation, is that “… many adults fall into a ‘coverage gap’ of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits.” Moreover, more than half of those in the coverage gap reside in states already beset with large uninsured populations: Texas, Florida, Georgia and North Carolina.
The result is a national petri dish where we can see and compare the impact of state Medicaid expansion under the Affordable Care Act—on state economies, on hospitals and on healthcare consumers.
▶ Colorado Sees Expansion as a Win-Win Situation
Last year, the Robert Wood Johnson Foundation analyzed data from 11 states and the District of Columbia to understand the financial impact of Medicaid expansion on their economies. According to their report, expansion states have already seen:
- Lower spending on programs for the uninsured
- Additional revenue from existing insurer or provider taxes
The analysis also shows that “Medicaid expansion states are seeing broader benefits, including job growth, deep reductions in uninsurance, and related decreases in hospital uncompensated care costs.”
Consider the results in Colorado. The Colorado Health Foundation’s report, “Assessing the Economic and Budgetary Impact of Medicaid Expansion in Colorado: FY 2015-16 through FY 2034-35,” identified several benefits directly linked to Medicaid expansion, including:
- More than 31,074 new jobs created, primarily in healthcare related industries
- State GDP growth of 1.14 percent, approximately $3.8 billion
- Increase in General Fund Revenues of $102.4 million
In addition, the study notes that Average Annual Household Earnings rose by $643, which positively impacts retail, food service and other sectors impacted by household spending.
Of course, a portion of the federal contribution for states that expanded Medicaid ended in 2016, so it will be interesting to see how the numbers change in 2017 and beyond as states absorb a greater share of the expansion’s cost and must find ways to cover this added expense.
▶ Safety-Net Hospitals Benefit under Medicaid Expansion
While safety-net hospitals have felt a negative impact from the Centers for Medicare and Medicaid Hospital Readmissions Reduction Program due in part to the large number of disadvantaged healthcare consumers they serve, Medicaid expansion has proved to be advantageous.
According to research by the Georgetown University Health Policy Institute, state Medicaid expansion under the Affordable Care Act offers safety-net hospitals four clear benefits over similar healthcare providers in non-expansion states:
Significant reductions in uninsured patients, resulting in less uncompensated care
Budget savings that are being used toward new clinics, equipment and staff, empowering safety-net hospitals to further reduce gaps in care
Improvements in specialty care access
Focused programs for improving care delivery, something that safety-net hospitals in non-expansion states are doing less
Overall, in expansion states, these critical healthcare providers find their bottom lines moving from the red into the black. The report says, “For example, one FQHC went from a $2.5 million end-of-year loss prior to expansion to a $2.5 million surplus the year after.” Another hospital reported, “We have by far had the two best financial years in our history, and this has been driven entirely by Medicaid expansion.”
▶ Healthcare Consumers Experience Mixed Results
As mentioned in a previous blog, a study published in JAMA Internal Medicine found that healthcare consumers in Medicaid expansion states tend to fare better than those in non-expansion states. A survey of 9,000 healthcare consumers found that in addition to decreases in uninsured rates that were 3 times larger than in non-expansion states, Medicaid expansion contributed to better access to primary care, more affordable prescriptions, lower out-of-pocket expenses, less risk of ER visits and more screening and regular care for chronic conditions.
The downside, however, is that not all of these advantages lead directly to improved health. Even amid the positive news from Colorado—a rise in the number of “Young Invincibles” who are now insured and a decline in the number of minorities who are uninsured—the number of healthcare consumers who avoid filling a prescription, visiting the dentist, or seeing a family doctor or specialist due to cost only fell by 2 percent. What’s more, screenings and regular care for chronic conditions don’t necessarily translate to engaged patients.
To achieve the best results from healthcare coverage, providers and insurers alike need to understand what motivates individual patients—and fine-tune their communications to encourage active participation in their health journey. That’s something that neither state Medicaid expansion under Affordable Care Act nor private health insurance can do on its own.
Patient/member engagement can be enhanced using deep consumer insights from market research and psychographic segmentation by personalizing communications and interactions in a way that appeal to the patient, resonating in such a way that the patient feels compelled to pursue the appropriate behaviors.