Good Schools, Low Taxes, and Access to Medicaid?

As we pass the fourth anniversary of the Affordable Care Act (ACA), policymakers are finally able to see the impacts of major components of the legislation, including the Medicaid eligibility expansion. Under the goal of increasing access to insurance for the uninsured, the role of Medicaid expansion is to help cover low-income populations that do not make enough to qualify for a government subsidy in state exchanges. However, the Supreme Court’s 2012 response to challenges of the law now gives states a choice in terms of eligibility requirements, which many have been grappling with ever since. Even though the federal government promises to bear the majority of the costs for newly eligible enrollees for the next few years, about half of the states still have not decided to expand Medicaid eligibility, due to various financial and political concerns.

One such concern is the “welfare magnet” hypothesis – the worry that states expanding Medicaid will experience a large influx of patients moving into that state in order to access Medicaid. Researchers at Harvard’s Medical School and School of Public Health investigate the validity of this concern in a 2014 Health Affairs article and find little evidence of large net migration effects.

The authors examine previous, independent Medicaid expansions in Arizona, Maine, Massachusetts, and New York between 2001 and 2007 and the respective migration trends in and out of those states. They compare data on interstate migration of nonelderly low-income adults in the expansion states to those in states with similar geographic and demographic characteristics: New Mexico and Nevada for Arizona, Pennsylvania for New York, New Hampshire for Maine, and Connecticut and Rhode Island for Massachusetts. Data for the study come from the 1998-2012 Annual Social and Economic Supplements to the Current Population Survey by the United States Census Bureau and focus on individuals ages 19-64 with family incomes less than 200 percent of the poverty level. The researchers look at individuals who migrated for any reason, both into a state (in-migration) and out of a state (out-migration). Finally, in order to determine trends in migration in both the expansion and control states, the scope of the data extends five years prior to expansion and five years after.

After controlling for individual-level characteristics not directly affected by the expansion policies and state characteristics, such as unemployment rate and median family income, the authors find no statistically significant differences in net migration between control and expansion states. This finding indicates there is no evidence that expanding Medicaid caused any state to experience larger in-migration. The authors also evaluate the hypothesis within subpopulations that could potentially have greater incentives, like childless adults (who might be eligible for Medicaid in a neighboring state, but not their own) or people with fair or poor self-reported health, as well as ones who can move more easily, such as young adults. These migration trends were also not significant, except for young, childless adults, who were actually less likely to live in expansion states after eligibility changes.

The authors do note that there are some possible limitations to this study. For example, the results are conditional on the Current Population Survey correctly sampling the population that has moved, and survey income measures might vary slightly from Medicaid criteria. There is also significant regional clustering of expansion and non-expansion states, which means that people may have to migrate long distances for health insurance access.

Overall, the study adds to the growing literature on the issue of welfare-induced migration and is one of the first to focus on access to public health insurance. The authors suggest as a result of this evidence that states still deciding whether to expand Medicaid under the ACA should not give much weight to increasing costs due to interstate migration. However, it should be noted that the national attention given to the ACA is much larger than that for the studied expansions, which could still lead to unexpected migration patterns.

Article Source: Aaron Schwartz and Benjamin Sommers, “Moving For Medicaid? Recent Eligibility Expansions Did Not Induce Migration From Other States,” Health Affairs 33, No. 1 (Jan 2014): 88-94.

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