Negative Effects Of Medicaid Expansion


Data Show Work Requirements Lead To Large Coverage Losses

The effect of Medicaid on childrens health. [Advertiser content from RWJF]

In Arkansas, over 18,000 beneficiaries, or about a quarter of those subject to the work requirement, lost coverage over the first seven months of implementation. In New Hampshire, almost 17,000 beneficiaries, or about 40 percent of those subject to the work requirement, were set to lose Medicaid before the state suspended the requirement. In Michigan, some 80,000 beneficiaries, or about one-third of those subject to the work requirement, were set to lose coverage before the court vacated the states work requirement policy. These coverage losses are even higher than the 6 to 17 percent coverage loss that Kaiser Family Foundation researchers forecasted could result from implementing work requirements nationwide.

A study by Harvard researchers found that the uninsured rate among low-income Arkansans aged 30-49 the group potentially subject to work requirements rose from 10.5 percent in 2016 to 14.5 percent in 2018, after the work requirement took effect. There was no similar increase for low-income Arkansans of other ages or for low-income people aged 30-49 in other, similar states. This finding refutes claims, for example from HHS Secretary Alex Azar, that most people leaving Medicaid due to the policy did so because they found jobs with health insurance.

Positive Effects Of Medicaid Expansion Under The Affordable Care Act

Last week, the Kaiser Family Foundation released an issue brief on the effects Medicaid expansion under the Affordable Care Act had on coverage, access to care, and economic outcomes. In the brief, KFF reviews the findings of over 100 studies of the impact of states extending the eligibility of the Medicaid program to low-income adults between ages 19 and 64.

These studies show that Medicaid expansion significantly enhanced coverage. Coverage increases were seen across a wide spectrum of populations, from the expected low-income adults, low-income workers, and early retirees, to mothers and children who would likely have already been eligible. In addition, other research demonstrates that Medicaid expansion has reduced racial disparities in coverage.

Most of the studies also show that Medicaid expansion positively impacts access to care, utilization of services, the affordability of care, and financial security among the low-income population. Studies have also shown improved self-reported health following expansion, but additional research is needed to determine effects on health outcomes. Importantly, while some studies did not reveal any impact of Medicaid expansion on these measures, no studies show a negative impact. And the research reviewed by KFF indicates improved affordability of care and financial security for low-income people with Medicaid.

Spa Researchers Explore The Effects Of Medicaid Expansion On Nonprofit Hospitals

May 17, 2021

The 2010 Affordable Care Act expanded Medicaid eligibility to those with incomes below the federal poverty line, changing profit incentives and outcomes for hospitals in states that adopted it.

SPA Professor Khaldoun AbouAssi and PhD student Rui Wang just published The Impact of Medicaid Expansions on Nonprofit Hospitals, in the journal Nonprofit Policy Forum, exploring one such change. The researchers used data from Internal Revenue Service to examine the effect of the expansion on nonprofit hospitals, which are impacted differently than those that operate for profit.

A large proportion of patients of non-profit hospitals are low-income and rural populations, while the proportion is substantively smaller for for-profit hospitals, said Wang, explaining that these populations are more likely to have Medicaid coverage. Secondly, non-profit hospitals rely on more diverse funding sources such as contracts, subsidies, grants, membership dues, fundraising, and contributions and donations, tend to be more sensitive to changes in policy environments due to Medicaid expansions.

While their results suggest that Medicaid expansions did not affect the number or profitability of nonprofit hospitals, private contributions to nonprofit general hospitals fell by 23%. These larger institutions provide a range of services to a larger, more diverse base of customers, leaving them at a disadvantage when adjusting to changes in the policy environment.

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Number Losing Coverage Exceeded Policys Supposed Target Population: Beneficiaries Not Working Or Eligible For Exemptions

About 3 or 4 percent of those subject to the Arkansas work requirement were not working and did not qualify for exemptions, studies estimate. Yet each month, 8 to 29 percent of those subject to the requirement failed to report hours or reported insufficient work hours. In fact, over 75 percent of those required to report hours failed to do so each month. Likewise, a study estimates that all but a small minority of Medicaid expansion beneficiaries in New Hampshire were either working or ill or disabled , yet 40 percent of those subject to the work requirement were set to lose coverage had the state not put the policy on hold.

News accounts corroborate that eligible beneficiaries in Arkansas lost coverage and were at risk of losing coverage in New Hampshire. For example, one working Arkansas beneficiary with a chronic condition explained that he lost Medicaid and then could not afford medications, which in turn caused him to lose his job due to his deteriorating health. Another reported rationing her medication after failing to navigate the reporting requirement and losing coverage, despite working 25 to 35 hours each week which equates to well over the states monthly minimum requirement. And a New Hampshire woman described her struggle to obtain a medical frailty exemption, which failed because her primary care doctor and neurosurgeon each insisted that the other should fill out the necessary paperwork.

Whats The Big Picture

Side Effect of Medicaid Expansion: People Dropping Private Insurance ...

These are individual studies. Looking at all the research together might provide a more accurate picture of how the Medicaid expansion is performing. Another study in Health Affairs by Indiana University health services researchers systematically reviewed the literature to gather all available peer-reviewed evidence.

Since the start of Medicaid expansion, 77 studies, most of them quasi-experimental in design, have been published. They include 440 distinct analyses. More than 60 percent of them found a significant effect of the Medicaid expansion that was consistent with the goals of the Affordable Care Act.

Only 4 percent reported findings that showed the Medicaid expansion had a negative effect, and 35 percent reported no significant findings. Negative effects could include more uninsurance and increased wait times, but none showed decreased quality. It should be noted, moreover, that the few studies with negative outcomes were more likely to employ methodologies that were less likely to be able to show that Medicaid was causing these outcomes.

The majority of analyses looked at access to care, and they showed that after the Medicaid expansion, insurance coverage improved and the use of health services increased. Its harder to study quality than access, but 40 analyses in 16 studies did so. About half of these reported improvements in quality measures like diabetes monitoring or preventive care screenings.

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Expanding Medicaid Puts Those Most At

As of December 2018, over 2 million North Carolinians were enrolled in the states Medicaid program. Thats approximately 1 out of every 5 people in the state.

Some want the state to expand its Medicaid program to include able-bodied, working-age adults, most of whom have no dependent children. Doing so would increase enrollment by approximately half a million people, an increase of at least 25 percent.

Medicaid expansion is again starting to gain steam as an election issue, but why is Medicaid expansion a bad idea for North Carolina? The most compelling reason: it will crowd out care for those who need it most.

Medicaid already serves the most at-risk populations. Expanding Medicaid would force traditional Medicaid populations to compete for limited access to care with hundreds of thousands of mostly childless, able-bodied adults.

North Carolina context

The key issue of the 2019 legislative session was the battle over the expansion of the states Medicaid program under the Affordable Care Act . Medicaid expansion was one of the key reasons Gov. Roy Cooper vetoed the state budget, and the governors legislative representative even went as far as to say The session ends when we get Medicaid expansion.

The bigger picture of Medicaid expansion

Civitas has written many times about the issue of Medicaid expansion crowding out care for the most vulnerable . But the point boils down to one simple statement: insurance coverage does not equal access to health care.

Expansion Does Not Cost States Money It Saves Them Money

The cost of Medicaid expansion is largely an academic question, since most states save money by expanding Medicaid. Savings are realized through:

  • reduced costs of uncompensated care,
  • higher federal matching rates when existing Medicaid members move from coverage that had a lower match,
  • increased tax revenue from additional spending on health care, and
  • lower demand for state-funded programs.

These findings are consistent with a recent report showing Medicaid expansion in Michigan yielded clear fiscal benefits for the state. When looking at states neighboring Oklahoma, we can see:

  • New Mexico saw savings in mental health, which were reinvested to expand mental health services and increased tax revenue, and
  • Arkansas cut the cost of serving pregnant women by more than half when it shifted their care to the 90 percent federal rate, and it received additional federal funding for community health centers.
  • Louisiana saved $190 million during the first year of expansion and expects to save nearly double that in the second. Savings came from using Medicaid rather than state funds for many services provided by Corrections and other state agencies, and reduced payments to hospitals for uncompensated care

Source: OK Policy Calculations from Leavitt Partners, Covering the Low-Income, Uninsured in Oklahoma

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Current Results From The Medicaid Expanders

Health care reform’s negative impact on Medicaid

First, despite these challenges, the ACA has significantly expanded Medicaid enrollment. In fact, Medicaid enrollment has increased by 18 percent in the last year offering coverage to 69 million low-income Americans as of November 2014. For states that expanded Medicaid, enrollment increased 25.5 percent, while non-expansion states saw a rise of 7 percent. One of the most dramatic coverage expansions occurred in Kentucky, where a combination of Medicaid expansion, low incomes, and a historically very low income eligibility threshold, increased coverage by over 70 percent.

The Urban Institute estimated that non-expansion states are causing six million people across the U.S. to remain uninsured in 2016. Texas represents the largest number of uninsured at 1.5 million, with three statesTexas, Florida and Georgiaaccounting for half of that total. The report also estimates that states not expanding will forego $37 billion in federal matching funds and $14 billion in hospital reimbursement in 2016.

Finally, while many critics point to the large cost of Medicaid programs, one recent analysis indicates that Medicaid eligibility for children produces enough additional tax collections over the long term to approximately pay for itself. The study found that childhood Medicaid raised cumulative taxes paid, reduced government earned income tax credit transfers, and increased cumulative wages among females.

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Expanding Medicaid Also Expanded State Economies

This paper, so far, has focused on the impact of Medicaid expansion on members health and financial stability. Indeed, expansions purpose is to increase access to health care and improve outcomes. However, it also dramatically improves state economies. As this section will show, expansion is one of the most effective economic development programs available to states.

Medicaid expansion grows state economies in two related but different ways. First, additional federal spending on health care increases jobs, income, and facility expansion in the health care sector. Second, the federal funds reduce existing state and private spending. As summarized by the University of Montanas 2019 analysis:

Even without Medicaid expansion, beneficiaries would have received some health care. Medicaid expansion changes who pays for this health care. Without expansion, the state, the federal government, employers, providers, and the beneficiaries themselves all paid for some of the care that is now paid via Medicaid. With expansion, the federal government pays for nearly all expansion beneficiaries health care.

Medicaid Expansion Is Affordable For States

As nearly 40 states have expanded Medicaid, we can estimate how many people will enroll in Oklahoma and what it will cost to serve them. In Oklahoma, the additional state costs are likely to be less than 2.5 percent of the state budget. However, the cost is less than half the picture. States save more money than it spends given both cost savings and tax revenues from the additional $1 billion-plus in federal spending on expansion. These findings are derived from national research, experience in nearby states, and Oklahomas exhaustive study of expansion.

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Quantifying The Benefits Of Closing The Coverage Gap

Closing the coverage gap would have tangible, meaningful benefits for low-income populations in nonexpansion states well beyond that of affordable, comprehensive health insurance. Some recent data points from the literature on the effects of expanded Medicaid coverage can be used to illustrate the magnitude of the impact of closing the gap on mortality, medical debt, and housing evictions.**

Reduced mortality

The benefits of Medicaid expansion for health care access and outcomes are well documented. Coverage improves peoples access to care and care utilization. States that have expanded Medicaid have seen lower rates of hospitalizations related to opioid use disorder as well as earlier detection of cancer. Medicaid expansion can literally save lives: It is associated with reductions in cardiovascular mortality, maternal mortality, infant mortality, mortality of the near-elderly, and overall mortality. Medicaid expansion has also been shown to narrow racial disparities in health outcomes, with gains in birth weight for Black infants and reductions in maternal mortality for Black women.

In a 2017 study, health economist Benjamin Sommers found that state Medicaid expansion was associated with one life saved annually for every 239 to 316 adults gaining insurance. Using the more conservative end of Sommers range, the authors estimate that covering the 2.2 million adults in the gap would result in about 7,000 fewer deaths each year.

Table 1

Less medical debt

Fewer evictions

States Experiences Confirm Harmful Effects Of Medicaid Work Requirements

Medicaid expansion has no negative effect on cardiovascular procedural ...

Beginning in 2018, the Trump Administration encouraged states to adopt policies taking Medicaid coverage away from people not meeting work requirements. While 12 states received approval for these policies, several were blocked by the courts, and none are currently in effect. But data from Arkansas ten-month implementation of its policy and brief implementation in Michigan and New Hampshire provide direct evidence of these policies harmful effects.

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Seven Reasons States Should Just Say No To Medicaid Expansion


Democrats are desperately hoping the states will accept the Medicaid expansion being foisted on them by President Obamas health care law, but they may be be disappointed.

The primary reason for their concern is blatantly self-serving: ObamaCares success, like its RomneyCare prequel in Massachusetts, will be judged solely by how many uninsured people get coverage. The pretense of increasing quality and lowering costs was abandoned months ago now its all about reducing the uninsured.

If states refuse the Medicaid expansion, which the U.S. Supreme Court has ruled they can, the whole idea of universal coverage goes out the window. And ObamaCare will be judged a failure.

Currently, nine states have rejected the Medicaid expansion and six are leaning against it 13 have said yes and four are leaning toward it. For states that are still undecided, here are several reasons they should reject the expansion.

The problem highlights a serious misunderstanding among Democrats pushing the legislation: Access to health insurance is not the same as access to health care. ObamaCare goes to great strides, and even greater expense, to ensure people have coverage. That does not mean they will be able to get care.

While Medicaid is better than having no insurance, expansion only exacerbates Medicaids many problems. Coverage for the poor should not be synonymous with poor coverage.

The Effects Of Earlier Medicaid Expansions: A Literature Review

The American Rescue Plan of 2021 temporarily increased the federal government contribution for Medicaid expansion to the 13 states that have not yet expanded Medicaid coverage to all low-income adults. Since the Affordable Care Act expansion of Medicaid in 2014, there have been numerous studies that looked at its impact. These studies find first order effects including increased insurance coverage and improvements in health with no negative impact on state budgets. They also find second order, or indirect, effects such as gains in food security, housing security, financial wellbeing, and child support. These important effects have all come with little impact on state budgets as federal funding and decreases in state spending on uncompensated care, among other things, tend to cover the increased costs associated with expansion.

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Changes In Coverage Affordability Service Use And Problems Accessing Care Among Previously Eligible Parents 20122013 To 20162017

Between 20122013 and 20162017, the uninsured rate among previously eligible parents in our sample fell by 13.7 percentage points, from 38.1 percent to 24.4 percent, with a gain in Medicaid coverage of 11.0 percentage points . Accompanying the reductions in uninsurance were reductions in affordability problems and increases in reporting a usual source of care and having a doctor visit in the past year. Specifically, unmet needs for medical care due to cost fell by 4.8 percentage points, a decline of 30 percent, and problems paying family medical bills fell by 9.9 percentage points, a decline of 29 percent. Over the same period, the share of previously eligible parents who reported a usual source of care increased by 9.6 percentage points, and the share with a general doctor visit increased by 7.9 percentage points .

Insurance Coverage, Affordability, and Access to Care for Previously Eligible Parents, 20122013 and 20162017. Source: Authors analysis of 20102017 National Health Interview Survey. Notes: Previously eligible parents are adults ages 1964 who are the parent of a child under 19 in a state with a 2010 parental Medicaid eligibility threshold below 70% FPL and with incomes below that threshold. The sample also excludes noncitizens and those with Medicare, SSI, and pregnant women. * P< .10, ** P< .05 on change over time.


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