All Roads Lead to Health: Medicaid Expansion Could Be Valuable Regardless of Method

The expansion of Medicaid to individuals with incomes that are up to 138 percent of the federal poverty level is a pillar of the Affordable Care Act (ACA). The expansion was intended to be implemented nationwide, helping to correct historically wide variations in income eligibility criteria across states. However, a 2012 Supreme Court ruling struck down the nationwide mandate, allowing states to choose whether or not to expand Medicaid. Currently, 31 states (and the District of Columbia) have chosen to expand, with another three states now in discussions to do so.

States that have chosen not to expand Medicaid have often cited budgetary concerns, political pressures, or concerns about provider participation. However, even states that expand have had to decide what form the expansion would take. A majority of expansion states have chosen to simply expand their traditional Medicaid programs, but some others have applied for a federal Medicaid waiver for flexibility in designing their expanded systems. A few states, like Arkansas, have decided to implement a “private option” program in which states use Medicaid funds to help enrollees buy private coverage on the states’ ACA Health Insurance Marketplaces. These patients are eligible to buy plans with significant reductions in cost sharing that provide more generous benefits with no premium payments.

Research on this expansion has focused primarily on how it is reducing the number of uninsured individuals, but few have tried to understand whether patients are made better off under traditional Medicaid expansion or through private alternatives. A recent Health Affairs study by Benjamin D. Sommers, Robert J. Blendon, and E. John Orav seeks to better understand the effects of Medicaid expansion on access to care, affordability, utilization, preventive behavior, and overall health status. The authors are not only interested in whether the expansion has positive effects relative to non-expansion but also whether the type of expansion makes a difference for patients.

In order to understand these effects, Sommers et al. conducted a telephone survey of low-income individuals in three high-poverty, Southern states–Kentucky, Arkansas, and Texas–before the Medicaid expansion in 2013, and then a year later in 2014. Kentucky and Arkansas both chose to expand Medicaid, with Kentucky expanding traditional Medicaid and Arkansas using the private option. Texas chose not to expand.

The researchers were interested in seeing whether survey responses to questions about access, affordability, behavior, and health status changed over the first year of the expansion, and whether or not the changes were significantly different between the two expansion states (Arkansas and Kentucky) and the non-expansion state (Texas). Additionally, by comparing the changes in survey results for each expansion state, separately, to Texas, as well as the two expansion states to each other, the authors could see if traditional Medicaid expansion had more of an impact than the private option, or vice versa.

The authors find that expansion does have a significant positive impact on individuals’ health relative to non-expansion. The rate of uninsured individuals in Arkansas and Kentucky dropped 14 percentage points more in the first year of the expansion than it did in Texas. Additionally, fewer patients in expansion states reported skipping medications due to cost or having trouble paying medical bills, and there were greater increases in regularly receiving care for chronic conditions in expansion states.

While the decision to expand Medicaid was found to be meaningful for residents, the method of doing so was found to make little difference. When comparing changes in survey responses between Arkansas and Kentucky over the first year, the authors find almost no significant differences in access, affordability, behavior, or health status. The authors do, however, find that the type of insurance patients receive is predictably different by state, since more Kentucky patients utilized traditional Medicaid and more Arkansas patients used private insurance. Further, the authors find that there was a larger reduction in patients reporting difficulty paying medical bills in Kentucky than in Arkansas, suggesting that financial coverage under Medicaid is more generous, or less cumbersome, than private insurance.

Still, this study suggests that Medicaid expansion is beneficial regardless of which form it takes. States that are on the fence about expanding might want to be given more opportunities to apply for waiver programs that can help them expand Medicaid while sidestepping potential budgetary or political issues. Further research will need to be conducted to see effects over time and in other states, but these early results provide evidence that expansion is valuable for patients.

Article Source: Sommers, Benjamin D., Robert J. Blendon, and E. John Orav. “Both the ‘Private Option’ and Traditional Medicaid Expansions Improved Access to Care for Low-Income Adults.” Health Affairs 35(1), 2016.

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