States Expanding Medicaid Face Challenges of Their Own

Last week, I wrote about the states that have decided not to expand Medicaid this year.  The decision will cost them in money and lives. 

But the 24 (and counting) states that have chosen to expand Medicaid will face challenges of their own.  As a new article in Health Affairs Blog reveals, expanding states will have plenty to do to assure that the benefits of expansion reach those most in need.

The article, entitled Lessons of Early Medicaid Expansions Under the Affordable Care Act, reviews the experiences of five states and the District of Columbia in expanding Medicaid benefits to additional populations using authority granted to them under Obamacare.  The five states were Connecticut, California, Minnesota, New Jersey, and Washington.

All of the states were able to capture federal dollars to support state or local low-income insurance programs.  But, according to the authors, there were seven lessons these states learned that could be warning signs to other states banking on the savings.

One lesson was that they could not predict the size of their eligible populations as well as they thought they could.

For example, when Connecticut’s expansion was approved in 2010, it was estimated that 45,000 people would be affected.  By May of 2013, over 90,000 had been enrolled.  So while Connecticut may have saved $50 million on the first 45,000; it may have spent all of that on the second.

Connecticut will still benefit in the long run – the original expansion took place under the old federal reimbursement rate.  Higher reimbursement begins in 2014.

But I spoke recently with one former state official, who echoed the concerns of others.  He said that taking into consideration all of the state’s financial difficulties in recent years, perhaps the state should have waited to expand.

Another lesson was that it was not as easy to enroll newly eligible people as the states thought it would be.

On the surface, enrollment seemed straightforward enough.  If a person’s income was below a certain cut-off – 138 percent of poverty – he or she was eligible under the expansion and could enroll.

But this presumes that people are following the news as closely as our public officials do.  And it also presumes that they can easily calculate how much income 138 percent of poverty means for them, taking into account their own family situation.  Finally, it presumes that they can get to the right place to file an application and verify their income, their address, and other information.

Beyond that, once they were enrolled, they often moved or had other changes in their status.  And that meant making certain that the state found them at their new address and captured up-to-date information.

The federal government anticipated these challenges when it provided for more navigators to assist with enrollment.  But not every state is on board with the widespread use of navigators. Even though Florida chose not to expand Medicaid, it still passed a law this year placing some unnecessary and onerous registration requirements on the new navigators.  States following Florida’s lead may discourage both Medicaid and private insurance enrollment in general.

The authors also found that expanding states were covering more people with mental illnesses than they anticipated.

To anyone following the implementation of Obamacare closely, this is no surprise.  The mental health coverage required by both Obamacare and the soon-to-be-implemented Mental Health Parity Act is far more generous – and fairer – than it has ever been.

The authors think that the jury is out on whether every expanding state will experience this.  The early expanders typically focused on very poor people, and there may be more people with mental illness in this group than in the poor and near-poor populations most affected by Medicaid expansion.  We will find out soon enough whether this is so.

Finally, the authors also noted that the political context for expansion is important. 

At bottom, states that want to provide coverage to more people will find a way to do it.  Those that do not, will not.

But in every state, the political drumbeat for better coverage is going to get louder over the next year or two.  

And, according to the authors, the drumbeat may be loudest among the safety net providers.  Hospitals and community health centers have the most to gain by expansion, and the most to lose in states where the numbers of uninsured remain the highest.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/