New National Reports Document the Value of Medicaid Expansion

Monday, October 27, 2014 at 6:54 PM by

Expansion States Show Much Greater Improvement on Uninsured Rates and Uncompensated Care 

The evidence in favor of expanding BadgerCare keeps growing as new analyses compare the experience of states that have expanded coverage and accepted the increased federal funding and the states that haven’t done so. Several new studies by national organizations show that Medicaid expansion states have seen much larger drops in the uninsured and in uncompensated care, yet their Medicaid costs are growing at a slower rate than in the non-expansion states. 

The following is a brief summary of three recent reports: 

Gallup data on changes in the uninsured ratesGallup survey data from across the nation show that states that have expanded Medicaid eligibility and are operating their own insurance Marketplace have achieved a much larger drop in the percentage of uninsured people than the so-called “non-expansion” states. “The uninsured rate declined 4.0 points in the 21 states that have implemented both of these measures, compared with a 2.2-point drop across the 29 states that have implemented only one or neither of these actions.” 

That difference is made more impressive by the fact that the expansion states already had much lower uninsured rates among non-elderly adults. The rate in those 21 states dropped from 16.1% to 12.1%, compared to a drop from 18.7% uninsured to 16.5% in the other 29 states. The Gallup data indicate Wisconsin’s rate dropped 2.1 percentage points, from 11.7% to 9.6%. That’s a good start, but Wisconsin has a long way to go to accomplish the Governor’s goal of cutting in half the number of uninsured residents. 

The Urban Institute’s Health Reform Monitoring Survey has shown an even larger difference in the improvements in the insurance rates between expansion and non-expansion states, but it doesn’t contain any state-specific data.

Survey of state Medicaid agencies – Another very interesting resource that was recently released is the 14th annual 50-State Medicaid budget survey by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU). This survey of all the state Medicaid agencies found that the 27 Medicaid expansion states (plus DC) expect much smaller increases in Medicaid spending than the 23 “non-expansion” states. (WI is included in the latter category.) Specifically, the survey found the following:

  • The expansion states (and DC) expect Medicaid enrollment increases averaging 18% in the current fiscal year, and state spending increases of 4.4%.
  • The non-expansion states expect enrollment growth of 5.2%, while the state portion of Medicaid spending increases at a faster clip of 6.8%.
  • The report also provides estimates for Medicaid enrollment and spending growth in fiscal year 2014, and those trends are similar to those in FY 2015.

Declines in uncompensated care – Similar patterns can be found in the preliminary data and projections related to the effects on uncompensated care in hospitals. A recent report by the HHS Office of the Assistant Secretary for Planning and Evaluation projects the following:

  • Hospitals’ uncompensated care is projected to decrease by $4.2 billion this year in Medicaid expansion states compared to $1.5 billion in non-expansion states.
  • In percentage terms, the amount of uncompensated care is expected to decline 25% in expansion states, versus 9% in non-expansion states. 

Of course, there also a number of other reasons to expand BadgerCare and take the federal funding – including the fact that it could save state taxpayers roughly $300 million in the next biennium, or avoid deep cuts in Medicaid and BadgerCare.  (Read more reasons here.)

We will continue to monitor the effects of ACA implementation as additional studies become available.

 Jon Peacock

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