More About Matt Broaddus

Matt Broaddus

Broaddus joined the Center in December 1999 and is a Research Analyst in the Health Division.

Full bio and recent public appearances | Research archive at

GAO Medicaid Data Show Per Capita Caps Would Lead to Disparate, Harmful Funding Cuts

July 30, 2014 at 10:04 am

We’ve previously warned that proposals to change the formula for federal Medicaid funding for states to a fixed dollar amount per Medicaid beneficiary — known as a “per capita cap” — would mean cuts in federal funding for all states.  The change would hit some states particularly hard due to substantial differences in per-beneficiary spending and how fast such costs grow over time.  A recent Government Accountability Office (GAO) analysis backs up our warning.

GAO’s analysis shows that states vary widely in how much they spend per beneficiary, consistent with our own analysis and that of the Kaiser Family Foundation.  GAO estimated average spending in 2008 for each state for different groups of beneficiaries — a child, a person with a disability, a senior, and a non-disabled, non-elderly adult — using federal expenditure and enrollment data.  As one would expect, overall, on average, Medicaid spending on people with disabilities and on seniors was significantly greater than spending on other adults and on children.

But spending on these enrollment groups varied considerably among states.  For example, Medicaid spending per child beneficiary was $5,877 in Vermont and $1,702 in California.  And average Medicaid spending per senior beneficiary was $28,564 in Montana and $9,882 in Alabama.

House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT), who requested the GAO analysis, responded to the findings by reiterating their proposal to establish a per capita cap, under which the federal government would no longer cover a fixed share of each state’s overall Medicaid costs but instead would limit each state to a fixed dollar amount per beneficiary.

Rep. Upton and Sen. Hatch previously argued that a per capita cap would “normalize” Medicaid spending across states, implying that states with higher-than-average spending per beneficiary have inflated costs.  In reality, states with relatively low Medicaid spending per beneficiary would likely fare disproportionately worse than higher-spending states under such a cap, because they would receive relatively less funding due to federal funding formulas that are typically based on current spending per beneficiary.

GAO tried to identify the factors driving this spending variation.  It concluded that while some factors were within the states’ control, such as optional benefits offered and optional eligibility levels, many significant factors were clearly not, including geographic variation in health care wages, differing enrollee service needs, and demographic differences among states such as the percentage of enrollees who are seniors.  In other words, just as overall health care spending and utilization among the states vary, so does Medicaid spending per beneficiary.  As a result, nothing in GAO’s report indicates that states with higher spending per beneficiary were somehow “overspending” relative to those with lower spending per beneficiary.

GAO’s findings don’t justify proposals to alter Medicaid’s financing structure.  They do, however, emphasize that while all states would face cuts in federal funding under proposals like a per capita cap, some states would disproportionately face larger ones.

Expanding Health Coverage Provides Financial Protection Too, Study Shows

February 25, 2014 at 1:39 pm

The comprehensive health reform that Massachusetts enacted in 2006 improved residents’ financial well-being, likely by protecting them from high out-of-pocket medical costs (among other things), according to recent research from the Federal Reserve Bank of Chicago.  Combined with previous research, these findings suggest that the federal Affordable Care Act (ACA) will not only give people better access to quality health care but also help them avoid financial hardship.

As the share of Massachusetts residents with health coverage rose by about 7 percentage points, residents’ credit scores improved, personal debt fell 22 percent on average, and the likelihood of bankruptcy fell 18 percent, after controlling for other personal and macroeconomic factors.  The positive financial effects of health coverage were especially pronounced among residents who had lower credit scores prior to health reform, though residents across the income spectrum benefited.

Using a rich database of credit report information, the Federal Reserve analysts evaluated a wider array of direct financial outcomes than has previous research.  They evaluated the impact on financial outcomes of each percentage-point increase in the share of the population with health coverage.  Since Massachusetts had one of the country’s highest rates of health coverage before enacting health reform, the Federal Reserve analysis suggests that the ACA’s major coverage expansions would have even greater financial benefits in states with lower health coverage rates.

The Massachusetts results reinforce findings from the landmark Oregon health insurance experiment, which found that uninsured adults who gained Medicaid coverage not only had better access to health care than adults who remained on a waiting list for Medicaid but also were less likely to borrow money or leave other bills unpaid to cover medical expenses.

CHIP’s Start: Lessons for Early Enrollment Under Health Reform

November 12, 2013 at 3:45 pm

The Administration is expected to issue estimates this week of enrollment since October 1 in health reform’s Medicaid expansion and its new health insurance marketplaces — and some media have already reported that the numbers did not meet Administration expectations.  But, as we’ve learned by examining the early experience with the Children’s Health Insurance Program (CHIP), early enrollment numbers aren’t a reliable indicator of health reform’s long-term performance.

CHIP — now recognized as an undeniable success — started slowly, too.  When the program started in fiscal year 1998, only eight states began enrolling low-income children in the first quarter.  By the end of that year, only 29 states operated CHIP programs and more than half of the 665,000 children enrolled came from just three states where most of the enrollment involved children transferred to CHIP from their pre-CHIP, state-funded children’s health programs.

But, by the end of fiscal year 2000, all 50 states and the District of Columbia had used CHIP to expand health insurance coverage to more low-income children, and enrollment had reached 3.3 million children.  Growing steadily ever since, CHIP now provides health insurance coverage to 8.1 million children.

The Congressional Budget Office (CBO) has estimated that health reform’s coverage expansions will eventually lead to 12 million to 13 million more people enrolled in Medicaid (and CHIP) and to about 20 million people enrolled in subsidized marketplace coverage.  But, these results will be achieved over time.  For example, steady-state enrollment won’t come in Medicaid until 2015 and in the marketplaces until 2017, CBO estimates (see chart).  (The coverage gains will be larger than this if most or all states ultimately adopt health reform’s Medicaid expansion for low-income non-elderly adults.)

Similar to states’ experiences with CHIP, it will likely take several years — as well as sustained, cooperative efforts by states, the federal government, and stakeholders — to maximize that enrollment.  (An analysis from First Focus similarly concludes that CHIP’s early years show that it likely will take considerable time for health reform to achieve major coverage gains.)

We can’t measure health reform’s success solely on the first month or first few months of enrollment numbers — or even on all of 2014 — just as CHIP couldn’t be judged based on its first year’s modest enrollment.  Rather, as with CHIP, it will take several years of experience to accurately evaluate health reform’s coverage expansions.

Click here to read the full paper.

Medicaid Coverage Doesn’t Discourage Employment, New Study Shows

October 28, 2013 at 12:05 pm

A new National Bureau of Economic Research (NBER) report refutes the claim by some opponents of health reform’s Medicaid expansion that enrolling in Medicaid discourages people from working.

The report strengthens the case for states to adopt the Medicaid expansion, a choice that more states are making.  It also corrects one of the many myths surrounding Medicaid; our recent short paper corrects five others.

The report uses data from the Oregon Health Study, a landmark, ongoing study of the state’s Medicaid program that allows researchers to compare low-income adults selected in a lottery to enroll in a Medicaid expansion to those who remained on a waiting list.

Researchers found no statistically significant difference between the two groups either in the share that had earnings (slightly more than half for both groups) or in the amount of earnings.

The researchers also found that Medicaid enrollment boosted participation in SNAP (formerly food stamps) among eligible people.

The increased SNAP participation reflected helpful state practices to coordinate program enrollment as well as enrollees’ greater awareness of SNAP because of their experience with Medicaid.

The report’s findings add to the other positive outcomes associated with Medicaid enrollment that previous research using the Oregon Health Study has identified.  Low-income adults enrolled in Oregon’s Medicaid expansion are more likely than the uninsured to receive preventive care, and they experience far less financial hardship from out-of-pocket health costs.

New Census Bureau Data Show More Young Adults Have Health Insurance Coverage Due to Health Reform

September 20, 2013 at 3:07 pm

The Census Bureau released its annual American Community Survey (ACS) this week, confirming that more young adults were insured in 2012.  (Earlier in the week, Census released its more well-known Current Population Survey (CPS), which found that the uninsured rate among young adults fell again in 2012, but not on a statistically significant basis.  The ACS’ larger sample size makes its health insurance data more robust than what’s reported through the CPS.)

The share of 18- to 24-year-olds without health insurance coverage declined from 25.8 percent in 2011 to 24.3 percent in 2012, according to the ACS data.  This marked the second consecutive year that the uninsured rate for this group has fallen, now down 5.2 percentage points since 2010 (see chart).

These coverage gains are due to growth in private coverage among young adults primarily resulting from a provision of health reform (the Affordable Care Act, or ACA) that allows adult children to stay on their parents’ private insurance plans until they turn 26.  The share of 18- to 24-year-olds with private coverage increased to 63.2 percent in 2012, up from 61.6 percent in 2011 and 58 percent in 2010.

These findings amplify a growing body of research on the positive coverage effects of the young-adult provision.  A Commonwealth Fund survey found that 6.6 million adults aged 19 through 25 who either joined or stayed on their parents’ insurance plans between November 2010 and November 2011 could not have done so without the health reform provision.  Similarly, analyses by the Centers for Disease Control and Prevention, the National Bureau of Economic Research, and the Kaiser Family Foundation show significant coverage gains among young adults since 2010.  Other studies from the Commonwealth Fund and the RAND Corporation have found that health insurance coverage protects young adults with health concerns against financial hardship.

The increase in coverage among 18- to-24-year-olds means that they’re no longer the age group most likely to be uninsured.  That dubious distinction now belongs to 25- to 34-year olds, 27.3 percent of whom were uninsured in 2012.  However, the uninsured rate for this group — as well as other non-elderly adults — should fall considerably in 2014, when health reform’s major coverage expansions take effect.