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Tennessee Proposal Shows Growing Momentum for Medicaid Expansion

Contrary to some predictions, November’s election results haven’t stalled momentum among states to adopt health reform’s Medicaid expansion.  Tennessee Governor Bill Haslam yesterday became the sixth governor — and third Republican — in the past two months to announce an expansion plan.  Twenty-seven states and Washington, D.C. have already expanded (see map).

If the federal government and Tennessee’s legislature approve it, Governor Haslam’s “Insure Tennessee” plan would extend coverage to more than 200,000 uninsured Tennesseans through a demonstration project, or “waiver.”  The federal government has approved four states’ expansion waiver proposals, which give them added flexibility over their Medicaid programs.

Insure Tennessee contains elements that the federal government has approved for other state waivers.  As in Michigan, for example, newly eligible Tennesseans with incomes above the poverty line would make monthly contributions to individual accounts to cover their premiums and cost-sharing charges.  As in New Hampshire, newly eligible Tennesseans who had an offer of coverage from their employer but couldn’t afford the premiums would get help buying it.

To date, only three southern states have expanded Medicaid, which means most of the region isn’t experiencing the positive impacts from expansion.  The Kaiser Family Foundation reported that 86 percent of Americans in the “coverage gap” — with incomes too high for Medicaid but too low for federal subsidies to buy coverage through the marketplace — live in the South.

Among the three southern states that have expanded Medicaid, Arkansas and Kentucky report the nation’s largest drops in their uninsured rates this year (10.1 and 8.5 percentage points, respectively), and West Virginia’s uninsured rate has dropped 5.7 points.

Elsewhere in the South, Virginia Governor Terry McAuliffe will include a Medicaid expansion in his forthcoming budget, North Carolina Governor Pat McCrory has softened his opposition to expansion, and a group of Florida business leaders have unveiled their own expansion proposal.  These states, along with Tennessee, could take a big step toward closing the nation’s coverage gap.

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16

12 2014

Medicaid Expansion Isn’t Hurting State Budgets

State Medicaid spending rose just 2.7 percent in state fiscal year 2014, when health reform’s Medicaid expansion took effect in more than half of the states, a new report from the National Association of State Budget Officers (NASBO) estimates.  Along with Kaiser Family Foundation projections that state Medicaid spending in fiscal year 2015 (which began July 1 in most states) will grow more slowly in states that have expanded Medicaid than in the others, the NASBO report provides evidence that the Medicaid expansion isn’t hurting state budgets.

Both reports note a significant rise in total Medicaid spending — federal plus state — in fiscal year 2014 as 27 states plus Washington, D.C. extended eligibility to most people with incomes up to 138 percent of the poverty line.  Kaiser projects a 14 percent increase in total Medicaid spending in fiscal year 2015.

But since the federal government covers the entire cost through 2016 of covering people newly eligible for Medicaid due to the expansion (and no less than 90 percent after that), the story on state Medicaid spending is different.  Kaiser projects a 4.4 percent increase this fiscal year for Medicaid expansion states and a 6.8 percent increase for non-expansion states.

The NASBO and Kaiser reports focus on state Medicaid budgets, but Kaiser notes that expansion states will likely realize savings outside Medicaid, including in mental health, corrections, and state-funded programs for the uninsured.

As state legislative sessions approach, policymakers in a number of the 22 states that have yet to expand Medicaid are taking a fresh look.  Governors in Wyoming and Utah last week released details of their expansion plans.  These and other states considering the Medicaid expansion should note the mounting evidence that it’s no budget buster.

You can follow me on Twitter at @jcrosscall.

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09

12 2014

Low-Income Adults Favor Medicaid Expansion, New Survey Shows

Four-fifths of low-income adults surveyed in three southern states favor health reform’s Medicaid expansion, a new Harvard School of Public Health study finds.  The first quantitative analysis of potential enrollees’ views on Medicaid, the survey included residents of Kentucky (which has adopted the expansion), Texas (which hasn’t), and Arkansas (which has expanded under a waiver that allows it to enroll the expansion population in private marketplace coverage).

The survey was conducted in December 2013, during health reform’s first open enrollment period (and before implementation of the Medicaid expansion), to maximize the likelihood that respondents were familiar with the concepts in the survey.

Large majorities of respondents also said they believe that Medicaid’s quality of care, access to physicians, and affordability rival or outperform private coverage.

Roughly two of every three uninsured low-income adults surveyed in each state planned to apply either for Medicaid or subsidized marketplace coverage, the survey also found.

State policymakers should take into account this strong support for Medicaid among low-income adults as they debate whether to take up the expansion.  Twenty-three states (including Texas) haven’t expanded Medicaid.  In addition, Arkansas’ private-option expansion may not get the funding needed to continue, despite covering some 200,000 low-income Arkansans.

While the Harvard survey found that low-income adults value Medicaid highly and would enroll if eligible, it also found that many residents didn’t know whether their state has adopted the expansion.  So, achieving the full benefits of the expansion will require not just convincing more states to adopt it but also making more low-income eligible adults aware of it so they enroll.

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13

11 2014

States Can Stand Up for Veterans by Expanding Medicaid

Roughly 215,000 veterans in 23 states are uninsured and denied Medicaid because their state has refused to take up health reform’s Medicaid expansion.  Half of them live in five states:  36,000 in Texas, 32,000 in Florida, 20,000 in Georgia, 17,000 in North Carolina, and 12,000 in Tennessee.

Most veterans get health coverage from their employer, but for those without access to job-based coverage, substantial gaps exist.  While some veterans receive coverage through the VA health system, not all qualify.

Health reform, however, has greatly expanded uninsured veterans’ access to health coverage.  Nearly 90 percent of non-elderly veterans who were uninsured before health reform would be eligible for Medicaid or subsidies to buy private coverage through the new insurance marketplaces, the Urban Institute projected in 2012 — if all states take up the Medicaid expansion.

Unfortunately, 23 states haven’t.  That’s left 215,000 of the nation’s poorest uninsured veterans in a coverage gap, where their income is too high for Medicaid under prior eligibility rules but too low for marketplace subsidies.

States that have expanded Medicaid are making the greatest progress in reducing the ranks of the uninsured, we’ve pointed out.  Meanwhile, states that haven’t taken up the expansion are denying health coverage for their poorest residents, including many uninsured men and women who have served our nation.

 

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10

11 2014

State Medicaid Spending Growing Slower in Expansion States Than Others

States that have expanded Medicaid as part of health reform expect their share of Medicaid spending to grow more slowly this year than states that have not expanded, a new Kaiser Family Foundation report finds.  That’s yet more evidence that states are headed down divergent paths based on whether they have taken up the expansion.

The 28 states (including Washington, D.C.) that have expanded Medicaid or will expand it this fiscal year (2015) expect their Medicaid spending to grow by 4.4 percent this year, compared to 6.8 percent among non-expansion states, Kaiser’s annual survey finds (see graph).

What’s more, state Medicaid spending growth will actually slow in expansion states this year, down from 6.6 percent last year.  Meanwhile, non-expansion states expect a modest uptick in state spending growth from last year.

While benefiting from slower spending growth, expansion states are making substantial progress in reducing the ranks of the uninsured.  The uninsured rate among non-elderly adults has fallen by 38 percent in expansion states but only by 9 percent in non-expansion states, an Urban Institute survey found.  The fact that the federal government picks up the entire cost of newly eligible individuals under the expansion allows states to expand coverage while limiting their costs.

While the Kaiser report examined only state Medicaid budgets, it notes that expansion states also expect a more far-reaching positive impact on their overall finances:

States expanding Medicaid also typically cited net state budget savings beyond Medicaid.  States reported that expanded coverage through Medicaid could allow for reductions in state spending for services such as mental health, correctional health, state-funded programs for the uninsured and uncompensated care.

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27

10 2014

Medicare and Medicaid Should Be Protected in Trade Agreements

CBPP, AARP, the AFL-CIO, Consumers Union, and ten other national organizations have written to the U.S. Trade Representative asking that Medicare, Medicaid, and other health programs be excluded from the investor-state dispute settlement (ISDS) provisions of pending trade agreements.

ISDS would give companies a new legal avenue to challenge U.S. pricing and patent policies for drugs and medical devices: the ability to sue the U.S. government before an international arbitration panel that wouldn’t be subject to normal democratic checks and balances.  In our letter, we say:

ISDS . . . would allow global pharmaceutical firms to challenge mechanisms that state legislatures, the Congress and public agencies use to manage pharmaceutical costs in public programs.  For example, a pharmaceutical company could challenge a state’s Medicaid preferred drug list or drug utilization management rules that limit access to a certain drug under specific circumstances.  Reimbursement policies for medicines under Medicare Part B could be challenged.  If adopted, the President’s own proposal to establish rebates under the Medicare Part D program for low-income beneficiaries could be subject to an ISDS challenge.  Simply stated, ISDS would impose an unnecessary risk to government administered health programs by limiting what policy makers can do to keep these programs affordable for taxpayers and beneficiaries.

Concerns about ISDS are growing and span the political spectrum.  In a recent editorial, The Economist suggested various ways of defining and narrowing the scope of ISDS, including exempting measures “to protect legitimate public welfare objectives, such as health, safety, and the environment,” allowing only governments to bring complaints against another government, and making proceedings public and subject to appeal.  As The Economist concludes, “Firms need protection; but so does the right of governments to pursue reasonable policies.”

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22

10 2014

Indiana Should Revise Medicaid Waiver Proposal

Indiana has proposed to expand Medicaid and extend health coverage to as many as 374,000 uninsured Hoosiers through the Healthy Indiana Plan (HIP) 2.0.  As currently designed, however, the proposal would create barriers to coverage for low-income individuals and cause substantial numbers of people to remain uninsured, as we explain in a new paper.  The state should modify its proposal to ensure that all newly eligible adults are actually able to participate and receive necessary health care services on a timely basis.

HIP 2.0 would be a new demonstration project, or “waiver,” that incorporates features from the state’s existing Medicaid waiver, which was approved prior to the enactment of health reform and offers limited coverage to about 40,000 low-income adults.

Although Medicaid waivers give states additional flexibility in how they design their Medicaid programs, the Medicaid statute requires that waivers must test new approaches to Medicaid while promoting the program’s objective of delivering health care services to vulnerable populations that can’t otherwise afford care.  As proposed, HIP 2.0 falls short of meeting this standard in several important respects: aspects of the plan would almost certainly result in substantial numbers of low-income people being unable to receive health insurance and access care for significant periods of time.  Indiana should modify those parts of the proposal to ensure that newly eligible Medicaid beneficiaries can actually enroll in coverage and receive necessary health care services.

HIP 2.0 does drop some problematic features of the state’s existing Medicaid waiver, such as a cap on the number of enrollees and annual and lifetime dollar limits on coverage, to comply with changes that the health reform law made to Medicaid.  But the state is seeking approval to maintain certain other features of its current waiver that are inconsistent with the Medicaid expansion, such as charging premiums to people with little income and delaying the start date for coverage.  A substantial body of research, including Indiana’s own experience under its existing Medicaid waiver, demonstrates that charging premiums to people with low incomes discourages them from enrolling in and maintaining coverage.

Click here to read the full paper.

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17

10 2014

Do Medicaid and SNAP Reach Those Who Most Need Them?

Millions of low-income people qualify for both Medicaid and SNAP (formerly food stamps), but the federal government doesn’t regularly assess how many of them actually receive both.  That’s a significant omission: Medicaid and SNAP address the most basic needs of our poorest citizens, and health care and nutrition assistance likely produce more powerful results when provided together.  A new Urban Institute paper examining joint participation among eligible children and non-elderly adults in five states — something the federal government could do for all states every year — suggests there is substantial room for improvement.

Urban Institute researchers calculated joint participation rates for 2011 in Colorado, Idaho, Illinois, North Carolina, and South Carolina.  (These states participate in the Work Support Strategies initiative, which is developing and testing better ways to deliver key supports for low-income working families.)  They found significant gaps in joint enrollment: in four of the states, only about two-thirds of non-elderly adults and children who were eligible for both Medicaid and SNAP actually received both (see graph).

The findings are consistent with our 2011 report’s finding that a large share of poor children — who are very likely eligible for both Medicaid and SNAP — aren’t enrolled in both.

(To be sure, both findings predate health reform implementation, so they don’t reflect participation of many newly eligible low-income adults in states that expanded Medicaid.  Nor do they reflect the major changes in Medicaid application and enrollment systems that health reform requires in order to improve participation.)

Over 40 states co-administer Medicaid and SNAP for low-income families, often using joint forms, the same computer systems, and the same eligibility workers, so one program’s performance often depends on the other’s.  Yet the federal agencies that oversee the two programs issue program policy, oversee operations, and assess state performance on the two programs separately.

States are key partners in delivering the safety net, so it’s important to take a holistic view of their performance, not just a program-by-program approach.  An annual federal assessment of the share of Medicaid- and SNAP-eligible people in each state who actually receive both would better inform federal and state officials on how well we serve our poorest families and individuals.

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30

09 2014

Coverage Gap Widening Between Medicaid Expansion States and Others

People in states that have adopted health reform’s Medicaid expansion had a lower uninsured rate in 2013 (before the expansion took effect) than people in non-expansion states — and non-expansion states are falling further behind in 2014, several recent government and independent surveys reveal.

Some 14.1 percent of the people in the 27 states (including Washington, D.C.) that have expanded Medicaid lacked health insurance in 2013, compared to 17.3 percent in the 24 non-expansion states, according to the Census Bureau’s American Community Survey (see chart).

Next year’s Census data, which will reflect the substantial coverage gains expected in expansion states in 2014 due to the expansion (which took effect January 1), should show a further widening of this coverage gap.

Results from several independent surveys — and this week from the Centers for Disease Control and Prevention (CDC), the first government survey data showing health reform’s early impacts — show that this is already happening.  For example, the Urban Institute’s Health Reform Monitoring Survey found that the uninsured rate for non-elderly adults in expansion states fell from 16.2 percent to 10.1 percent between the third quarter of 2013 and the second quarter of 2014, compared to a decline from 20.0 percent to 18.3 percent in non-expansion states.

Health reform’s Medicaid expansion creates a pathway to coverage for all non-elderly adults with incomes up to 138 percent of the poverty line, including, for the first time, low-income adults without children.  However, the 2012 Supreme Court decision upholding health reform made the expansion a state option.  States can opt in to the expansion at any time; the federal government will pick up all of the cost through 2016 and nearly all of the cost thereafter.

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18

09 2014

Hospitals Benefiting From Medicaid Expansion, Report Finds

Hospitals in states that have expanded Medicaid as part of health reform are seeing a large drop in uninsured patients and higher-than-expected revenues, a new report from the PricewaterhouseCoopers (PwC) Health Research Institute finds.  It’s the latest evidence of the Medicaid expansion’s benefits for states, their businesses, and their residents.

Examining financial data for the first half of the year from the country’s three largest health care providers, PwC found a 47 percent drop in admissions of uninsured patients at affiliated hospitals in Medicaid expansion states.  This suggests a sizable drop in uncompensated care — consistent with a nationwide survey of hospitals by the Colorado Hospital Association after the first quarter of the year.  PwC also found that the rise in the share of patients with health coverage boosted providers’ revenues even more than they had anticipated.

Meanwhile, the Urban Institute projects that hospitals in the 23 states that have not yet expanded Medicaid (see map) will lose out on $157 billion in reimbursements between 2013 and 2022.

This PwC report is one of several indicators of the growing gap between states that have expanded Medicaid and those that haven’t.  The Medicaid expansion is driving large gains in health coverage, while states that haven’t expanded risk forgoing those gains as well as millions of dollars in savings.

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05

09 2014

New Study Shows Link Between Medicaid Coverage of Prenatal and Infant Care and Better Long-Term Health Outcomes

The benefits of good prenatal and infant care for a child’s development are well documented, so it makes sense that improving access to care by expanding Medicaid coverage to pregnant women and children would produce long-term gains.  A new study suggests that as well.

University of Michigan researchers examined the health in young adulthood of people born during the 1980s and early 1990s, when states significantly expanded Medicaid to cover more low-income pregnant women and children in response to new federal requirements and added state flexibility.  Building on a large body of research documenting the benefits of Medicaid, they found that people who were more likely to be eligible for Medicaid during their prenatal and infant stages had better health and fewer preventable hospitalizations as young adults than those who were less likely to be eligible for Medicaid.

Specifically, a ten-percentage-point increase in the share of women of childbearing age who were eligible for Medicaid was linked to the following positive outcomes for young adults (ages 19-33) born during the expansion:

  • lower body mass index and a 7 percent drop in the likelihood of obesity;
  • a nearly 2 percent decline in preventable hospitalizations overall and a 9 to 10 percent decline in preventable hospitalizations related to chronic conditions; and
  • an 8 to 10 percent drop in hospitalizations related to conditions that benefit from regular medical evaluations in early childhood, such as diabetes.

As noted, other studies have shown the health benefits of expanding Medicaid, but this study shows the link between Medicaid coverage and positive long-term health outcomes as well.  It’s one more reason why states that haven’t yet adopted health reform’s Medicaid expansion should get off the sidelines.

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04

09 2014

Wisconsin and Wyoming Tally Fiscal Cost of Rejecting Health Reform’s Medicaid Expansion

Recent budget reports from Wisconsin and Wyoming show that their failure to adopt health reform’s Medicaid expansion is costing them millions of dollars in forgone budget savings.

In Wisconsin, the legislature’s nonpartisan Legislative Fiscal Bureau estimates that the expansion, which covers non-elderly adults with incomes up to 138 percent of the poverty line, would have saved the state $206 million in the 2014 and 2015 fiscal years combined.

Governor Scott Walker chose instead to extend Medicaid coverage to adults only up to 100 percent of the poverty line through a separate waiver.  This means that the federal government is paying for the expanded coverage at the state’s regular Medicaid matching rate of 59 percent, rather than the much higher matching rate for health reform’s Medicaid expansion.  (For states that expand to 138 percent of poverty, the federal government will pick up 100 percent of the cost through 2016 and no less than 90 percent thereafter.)  The difference in matching rates is the main reason for the $206 million in forgone savings.

Wisconsin could still save between $261 million and $315 million over the 2016 and 2017 fiscal years by adopting the expansion during next year’s legislative session, the report estimates.  Gov. Walker has justified his opposition to it by arguing that the federal government would ultimately renege on its financial commitment, but those fears are unfounded.

In Wyoming, the state health department projects that the Medicaid expansion would save the state $50 million a year on other health programs for low-income uninsured residents.  As a result, Governor Matt Mead is moving to advance the Medicaid expansion during the coming legislative session.  More than 17,000 uninsured residents would gain access to coverage under the expansion, the Urban Institute estimates.

The 27 states (including Washington, D.C.) that have adopted the Medicaid expansion are already seeing dramatic gains in health coverage and reductions in the cost of providing uncompensated care to the uninsured.  Wisconsin, Wyoming, and the other 22 states that have not done so could realize similar benefits.

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28

08 2014