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Medicaid Expansion & Innovation Paying Off for Low-Income Americans

Eastman, Peggy

doi: 10.1097/01.COT.0000505519.08072.b5
Medicaid expansion

Medicaid expansion

The expansion of Medicaid under the Affordable Care Act (ACA) and innovative state Medicaid programs are having a positive impact on the health of low-income Americans, according to speakers at a briefing on Capitol Hill in Washington, D.C., sponsored by the Alliance for Health Reform and the Commonwealth Fund.

Medicaid is the nation's largest health insurer, covering nearly 73 million Americans. In fiscal year 2015, states spent $512.3 billion on Medicaid, a 15.1 percent increase over fiscal year 2014, according to the National Association of State Budget Officers.

The ACA gave states the option of expanding eligibility for Medicaid coverage, including access to the preventive and screening tests and examinations that can lead to early detection of cancer and other serious diseases. Expanding Medicaid eligibility has also led to better continuity of care for those who need disease management of chronic conditions.

With Medicaid expansion, “Overall we're seeing more office-based care, preventive care, and chronic disease management, and less reliance on the emergency department,” said Benjamin D. Sommers, MD, PhD, Assistant Professor of Health Policy and Economics at the Harvard T.H. Chan School of Public Health and Assistant Professor of Medicine at Brigham & Women's Hospital and Harvard Medical School. “Even as we spend more we get more,” said Sommers, a former Senior Advisor in the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services (HHS). “This is an investment that can produce real benefits.” He noted that expanding insurance coverage for low-income Americans translates into constructive health behaviors that reduce the risk of disease: “We're not just interested in giving people an insurance card.”

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High Poverty & Medicaid

Sommers co-authored a recent study of almost 9,000 low-income adults in three states, which demonstrated that when Americans with high poverty rates become insured under Medicaid, they take steps to improve their health (JAMA Intern Med 2016;176:1501-1509). The study compared results in two states that expanded health coverage, Arkansas (which used federal funding to purchase private plans for low-income adults) and Kentucky (which expanded Medicaid eligibility to include more low-income adults) with those in Texas (which chose not to expand Medicaid at all). The study surveyed U.S. adults with family incomes below 138 percent of the federal poverty level (about $16,000 annually for an individual or $33,000 for a family of four).

By 2015, 2 years after Medicaid and private health coverage expansion, low-income adults in Arkansas and Kentucky had significant improvements in health care access and affordability compared to low-income adults in Texas. Specifically, in Arkansas and Kentucky, having insurance coverage was associated with an increase in the likelihood of having a personal physician (12.1 percentage points) and a decreased reliance on the emergency department as a usual source of care (a reduction of 6.1 percentage points).

Sommers said health coverage also was associated with fewer delays in obtaining care because of cost (-18.2 percentage points); fewer skipped prescriptions (-11.6 percentage points); and fewer problems paying medical bills (-14 percentage points). Compared with Texas, the share of adults receiving regular care for chronic conditions increased 12 percentage points, while the share of adults reporting fair or poor quality of care declined 7.1 percentage points. The proportion of covered adults reporting excellent health increased 4.8 percentage points. Annual out-of-pocket medical spending dropped by 29.5 percent.

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Value of Expansion

Agreeing with Sommers on the value of expanded Medicaid was Rachel Nuzum, MPH, Vice President for Federal and State Health Policy of the Commonwealth Fund. Not only is Medicaid a major source of federal resources to states, but it also provides comprehensive coverage and strong patient financial protections, and critical support to safety net health providers and systems, and often leads the way in state-level health delivery system reform, she noted. Nuzum said a 2015 analysis of the Commonwealth Fund Biennial Health Insurance Survey suggests Medicaid enrollees have nearly equivalent access to care as those with private insurance in many areas.

“Most adults with Medicaid coverage continue to be satisfied with it,” said Nuzum. “We're not seeing long waits.” She said she and her colleagues were concerned about long waits to see health care providers and increased pressures on those providers with Medicaid expansion under the ACA, but those concerns were largely unfounded. She said that, not only does Medicaid expansion reduce uncompensated care, but it facilitates state-level health care delivery reform, such as patient-centered medical home initiatives to provide coordinated care. Nuzum said that, as of 2016, 24 states have a medical home initiative, including 14 multi-payer collaborations with private payors and Medicare. When they are part of a coordinated medical home, patients are less likely to experience cost-related access problems, such as skipping recommended treatments or not filling prescriptions, she said.

In Colorado, which expanded Medicaid under the ACA, more than 73 percent of those eligible for physical examinations under Medicaid receive them, said Gretchen M. Hammer, MPH, Medicaid Director at the Colorado Department of Health Care Policy & Financing. She noted that about 74 percent of adults on Medicaid in Colorado are working, so physical examinations can help keep them healthy and on the job. Hammer said Colorado has a service-based economy that includes drivers, child care workers, waiters and waitresses, and cashiers. Hammer said the expansion of Medicaid in Colorado has been good for the state's economy as well as the health of its citizens. Currently, Colorado's economy supports 31,074 additional jobs due to Medicaid expansion, a number expected to grow to 43,018 by fiscal year 2034-35, said Hammer.

“We deal with the most vulnerable population,” said Deborah Bachrach, JD, a partner at Manatt Health Solutions and former Medicaid Director and Deputy Commissioner of Health for the New York State Department of Health, Office of Health Insurance Programs. As such, she said Medicaid can be a powerful tool to address public health crises, improve chronic disease management, and facilitate the integration of physical and behavioral health services. Bachrach also emphasized that Medicaid can help to integrate social interventions into states' coverage, payment, and health delivery models.

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Value-Based Programs

In addition, Medicaid can be a flexible innovator in health delivery reform. Among the examples of Medicaid innovation showcased in the Capitol Hill briefing materials are these, drawn from a white paper produced by the Washington-based Center on Budget and Policy Priorities.

  • In 2012, Missouri's Medicaid and mental health agencies established coordinated “health homes” for two groups of beneficiaries: those with multiple chronic conditions and those with a diagnosed serous mental illness. The program aims to support care coordination for people who are making the transition from one care setting to another, such as from a hospital to a nursing facility. Every 4 months, Missouri examines its Medicaid data to identify additional beneficiaries who might be eligible for a health home under the program, and assembles a team of health professionals to provide needed care. Early data from the program show a drop in emergency department visits and preventable hospitalizations. Missouri saved about $52 per month in Medicaid spending for every program participant.
  • Tennessee is one of 44 states participating in the Money Follows the Person program, which helps Medicaid beneficiaries make a safe, coordinated transition from a nursing facility to their own home, the home of a caregiver, or a community-based residential facility. This program has reduced costs by cutting unnecessary nursing home stays. Based on a Tennessee estimate, it costs about $1,969 per month to care for a Money Follows the Person Medicaid beneficiary in the community—about half of the $3,710 monthly average cost to serve a beneficiary in a nursing facility.
  • The Wisconsin Department of Health Services has received a grant from the Centers for Medicare & Medicaid Services' Center for Medicare and Medicaid Innovation to establish a team-based integrated program for medically complex children—a group with high health-care needs—enrolled in its Medicaid program. An early evaluation of this model showed that inpatient hospital days and costs decreased by more than 50 percent after eligible children enrolled in the program. Parents were also more likely to report that their children's health needs were being met.
  • Through an HHS waiver, Oregon has established Accountable Care Organizations (ACOs), provider groups that offer a range of health services in a coordinated way. In Oregon, ACOs are known as Coordinated Care Organizations (CCOs). While the ACO model is known more for its use in the Medicare program, state Medicaid programs such as Oregon's are also adopting the ACO model. Oregon has seen emergency department visits and preventable hospitalizations decline since the waiver's approval in 2011. Oregon's largest CCO, Health Share, provides Medicaid coverage for three counties, including the city of Portland. With the state Medicaid funding it receives from Oregon, Health Share pays capitated rates to its contracted health plans and mental health agencies, which are responsible for their members' care.

Health Share provides higher-level case management services in the home or community for its highest-risk members, such as beneficiaries who have visited emergency departments six or more times annually. Oregon has seen emergency department visits and preventable hospitalizations fall markedly; the growth in Medicaid spending per beneficiary has also dropped by two percentage points below the levels projected in the absence of the HHS waiver.

While recent innovations in expanded Medicaid health care delivery are still works in progress, speakers at the Capitol Hill briefing stressed that Medicaid can be used as a tool to improve the health of low-income Americans and rein in the costs to do so. As Sommers put it, “Medicaid expansion could improve population health over the long term.”

Peggy Eastman is a contributing writer.

Wolters Kluwer Health, Inc. All rights reserved.
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