Exchanging Medicaid for Private Insurance

Studies | Health

No. 343
Friday, December 14, 2012
by Devon M. Herrick

The Supreme Court’s ruling that provisions of the Affordable Care Act that would take away all federal Medicaid funds from states that refuse to expand their Medicaid programs are unconstitutional inadvertently liberated millions of people who might have been forced into Medicaid.

Executive Summary

The Supreme Court has ruled that some provisions of the Affordable Care Act (ACA) were unconstitutional, specifically those that would take away all federal Medicaid funds from states that refuse to expand their Medicaid programs.1 The ruling inadvertently liberated millions of people who would have been forced into Medicaid. Other provisions of the ACA will give generous, sliding-scale subsidies to low-to-middle income individuals for the purchase of private health coverage in a health insurance exchange that will be set up in each state by the state or federal government beginning in 2014. Those who do not have access to an employer-provided health plan or Medicaid will be eligible for exchange subsidies.2 As a result:3

In states that do not expand Medicaid coverage to individuals with incomes of 100 percent to 133 percent of the federal poverty level, those individuals in that income range will be eligible for subsidized coverage in the exchange.

In every state, individuals earning 133 percent to 400 percent of poverty will be eligible for subsidized coverage in the exchange.

Medicaid versus the Exchange Coverage. In an expanded Medicaid program, federal health care spending on individuals earning 100 percent to 133 percent of poverty would approach $295 billion over a 10-year period (from 2014 to 2023). However, $295 billion in projected federal Medicaid spending on new enrollees could be replaced by private insurers paying much higher market rates for medical care. Private health plans in the exchange will pay physicians about 50 percent higher fees than they would have gotten from Medicaid. If millions of Medicaid-eligible patients are diverted into private coverage, doctors and hospitals might enjoy nearly $518 billion in private medical spending. Using this strategy:

Californians would enjoy about $31 billion in additional spending.

Residents of Florida could expect $19 billion more dollars spent on care.

Texas patients and providers would receive about $30 billion more in medical spending.

How Many People Will Enroll? Not all those who qualify will enroll: Medicaid uptake varies from state to state. But assuming that about 70 percent of those who qualify might enroll in private insurance, approximately 4.4 million individuals will have private health coverage who would otherwise be uninsured or enrolled in Medicaid.

How Generous Are the Subsidies in the Exchange? The subsidies in the exchange are incredibly generous. The most a low-income family has to pay is 2 percent of its income —toward a private health plan that would otherwise cost a family of four $14,500 or more, according to the Congressional Budget Office.

Introduction

The Supreme Court has ruled that certain provisions of the Affordable Care Act (ACA) are unconstitutional, specifically those that would take away all federal Medicaid funds from states that refused to expand their Medicaid programs.4 The ruling inadvertently liberated millions of people who might have been forced into Medicaid. Why? Because other provisions of the ACA will give generous, sliding-scale subsidies to low-to-middle income individuals for the purchase of private health coverage in a so-called health insurance exchange that will be set up in each state by the state or federal government. Those who have access to affordable health plans through their employer will not be eligible for exchange subsidies, but those who do not have access to an employer-provided health plan or Medicaid will be eligible.5 As a result:

In states that do not expand their Medicaid programs to individuals whose income is 100 percent to 133 percent of the federal poverty level, individuals in that income range will be eligible for subsidized coverage in the exchange.

In every state, individuals earning 133 percent to 400 percent of poverty will be eligible for subsidized coverage in the exchange.

Individuals with incomes above 400 percent of poverty will not be eligible for federal subsidies.6

By almost all measures, Medicaid coverage is inferior to private health insurance. [See the sidebar, “Problems with Medicaid.”] Now millions of people will have the opportunity to purchase private health insurance instead. Furthermore, states that already cover some of the individuals with incomes over 100 percent of poverty may have the opportunity to reduce income eligibility for Medicaid to 100 percent of poverty; thus, even more people would be eligible to purchase subsidized coverage in the exchange.7

Because the federal government will subsidize coverage in the exchange more generously than it subsidizes Medicaid, most states would save money by limiting Medicaid to individuals below the poverty level. This may give states a unique opportunity to restructure their Medicaid programs in ways that boost flexibility and improve health coverage for low-income individuals.

Medicaid under the Affordable Care Act

Medicaid is already the largest single expenditure of state governments today. Federal and state governments spent $389 billion on Medicaid in 2010.8  The country as a whole spends more on Medicaid than on primary and secondary education. At the rate the program is growing, it is on a course to consume the entire budgets of state governments in just a few decades.9  [See the sidebar, “How Medicaid Currently Works.”]

The ACA contains financial incentives for states to establish health insurance exchanges where qualifying individuals and small businesses can purchase subsidized, individual health insurance, starting in 2014. States that prefer not to operate their own exchange can choose to allow the federal government to establish and run the exchange.

Individuals who have access to an employer health plan are ineligible to purchase subsidized exchange policies — as are those eligible for Medicaid. Though people of any income level may purchase coverage in the exchange, subsidies will be available only to individuals and families with incomes below 400 percent of the federal poverty level — just over $92,200 for a family of four.10 Families with incomes from 100 percent to 133 percent of poverty will be required to enroll in Medicaid if it is available.

However, due to the Supreme Court ruling, a number of states are expected to opt not to expand Medicaid. In those states, a recent Congressional Budget Office (CBO) report estimated there are 3 million people with incomes between 100 percent and 133 percent of poverty.11  The actual number could be several times that size. According to the CBO, possibly half to two-thirds of the states may not expand eligibility above 100 percent of the federal poverty level.12 As a result, millions of citizens will be able to get private insurance instead.

Exchanging Medicaid for Better Coverage: How Much Will States Gain?

In an expanded Medicaid program, federal spending on newly eligible individuals earning 100 percent to 133 percent of poverty would exceed $295 billion over a 10-year period (from 2014 to 2023), based on historic Medicaid spending patterns. States would bear an additional $19 billion in costs. Although the federal government will provide most of the funds for states to cover this newly eligible population, it will increase the fiscal burden on many states, particularly those that do not already cover expanded optional populations.23 [See the sidebar, “Problems with Medicaid.”]  Many of those newly eligible for Medicaid will be relatively healthy adults — although many may have multiple health problems and chronic conditions.24 

However, if $295 billion in projected federal Medicaid spending were replaced by private insurers paying market rates for medical care, patients would enjoy better access to care and providers would receive an additional $223 billion in medical spending. The state share of the premiums to entice this low-income population to sign up for coverage would be about $9 billion over a decade. States could redirect the remaining $10 billion in net savings (after subsidizing enrollees’ share of premiums) to the uninsured or to Medicaid enrollees earning below 100 percent of the poverty level. Alternatively, states could use the savings to balance state budgets, or give it back to taxpayers.

Using this strategy, some states would fare better than others, depending on their population living just above the poverty line, and on the state Medicaid Fee Schedule. [See Figure IV.] For instance:

Californians would receive $31 billion in additional medical spending.

Florida residents could expect $19 billion more dollars for medical care.

Texas patients and providers would receive about $30 billion more care. [See the sidebar, “Medicaid in Texas.”]

More than 6 million Medicaid enrollees with incomes between 100 and 133 percent already qualified for Medicaid prior to the ACA. Federal spending on this group will reach an estimated $155 billion between 2014 and 2023. States will contribute an additional $100 billion. Some of these individuals qualify for Medicaid because a few states willingly expanded Medicaid eligibility prior to the ACA. Other enrollees are eligible because under different provisions of federal law — such as young children, expectant mothers and (depending on the state) the parents of eligible children. Some may be eligible because they have disabilities.

Prior to the ACA, many of these people would be Medicaid-eligible for only limited periods of time. “Maintenance of effort” regulations limiting the states’ right to scale back Medicaid programs currently prevent states from contracting eligibility. However, there may be opportunities in the future to move this population into exchange-based policies.25 If this happens, the additional spending on medical care and physician/hospital reimbursements would be approximately $180 billion more than what Medicaid will likely spend. If all individuals and families earning between 100 percent and 133 percent of poverty were covered by private insurance rather than Medicaid, the additional spending would exceed $400 billion over the 10-year period ending 2023.

How Would Private Coverage Affect Providers? How much better off would doctors and hospitals be under a system that utilized private coverage rather than an expanded Medicaid program? Medicaid payments to doctors and hospitals vary from state to state, and with only two exceptions (Alaska and Wyoming), private insurers pay much higher physician fees than Medicaid. If these individuals were privately insured, they would have easier access to doctors willing to treat them. Local doctors and hospitals could expect reimbursements far more generous than under Medicaid. How much more? Although it varies by state (and insurer), a rule of thumb is that private insurers generally pay fees at least 50 percent higher — and often double what Medicaid pays. For instance:

In New Jersey, private insurers’ fees are about 3.3 times what Medicaid pays physicians.

In California, private insurers’ physician fees are about 2.2 times what Medicaid pays.

In Florida, the ratio is 2.0.

Across all 50 states, the median physician fee schedule for private insurers is 40 percent higher than for Medicaid.47

The bottom line is that patients could expect far more care — and providers could expect far more revenue from treatments — if these individuals are enrolled in private health plans. [See Appendix Table II.] In addition, states may have the option to scale back coverage for those non-elderly individuals earning between 100 and 133 percent, who already receive some type of Medicaid benefit.48

How States Can Encourage Individuals to Purchase Coverage in the Exchange. There are numerous factors that affect take-up — that is, individuals’ decision about whether or not they should enroll in a public program. How many individuals can we expect to enroll if states choose to utilize private coverage in place of expanded Medicaid? A few months prior to the Supreme Court ruling, the CBO estimated that by 2022, when the ACA is fully implemented, about 17 million people would be covered by Medicaid. After the High Court ruling, the CBO lowered its estimate to 11 million people.49  This lower estimate assumes that some states will opt out of Medicaid expansion or limit new Medicaid eligibility to the poorest subset of the low-income population.

Medicaid uptake varies from state to state. Certainly all those who qualify will not enroll. Private coverage that allows individuals and families to see most physicians and utilize large hospital networks may provide an added incentive. Assuming that about 70 percent of those who qualify will enroll in the program, approximately 4.4 million individuals will have private health coverage who would otherwise be uninsured or enrolled in Medicaid.

Provisions in the Affordable Care Act require families earning less than 133 percent of poverty to pay no more than 2 percent of family income for their health insurance purchased in the exchange. Thus, states could encourage enrollment by subsidizing low-income families’ cost of enrollment. Consider [see Figure V]:

Two percent of income is $223 for an individual earning right at the poverty level.

It is $297 for someone earning 133 percent.

For a family of four, 2 percent of income at 100 percent of the poverty level is $461, while 2 percent of income for families earning 133 percent of poverty is $613.

Certainly this represents a significant amount of money for families making ends meet on a modest income. For instance, $461 (100 percent of the federal poverty level for a family of four) is $115 per family member, while 133 percent of the federal poverty level for a family of four is $153. States’ actual cost to pay this portion of the premiums would depend on take-up rates, income and family size. A safe estimate is that state subsidies to encourage individuals and families to enroll in subsidized health plans from the exchange would run about $200 per individual covered. If states paid the 2 percent share of income for 4.4 million people for a 10-year period, the aggregate cost would only be an estimated $9 billion dollars from 2014 to 2023. This is a modest sum for states looking for ways to encourage families to purchase health coverage — especially when the federal government is willing to subsidize the remaining portion of the cost.50

To facilitate enrollment, states could also set up portals that make it easy for those earning modest incomes to discover if they qualify. The whole point of having a Health Insurance Exchange is to create a one-stop-shop where people can obtain their health coverage if they lack access to employer coverage. To function correctly, an exchange would have to assess whether applicants have access to Medicaid, and what their income is to establish their share of the premiums. When the individual mandate goes into effect, individuals will have to provide proof of insurance or face losing their tax refund. Tax preparation firms, such as H&R Block, earn significant amounts of revenue from loan origination services for individuals due a refund or who qualify for the Earned Income Tax Credit (EITC). It would be hard to imagine a tax preparation service not helping individuals sign up for exchange coverage for a nominal fee.

Safety-net hospitals are well versed in assessing whether patients who enter through the emergency room doors qualify for Medicaid and helping them enroll. Hospital admissions departments would have an even bigger incentive to sign up people for private coverage considering that hospital reimbursements from private coverage might approach double what state Medicaid would pay.

How Generous Are the Subsidies in the Exchange? The subsidies in the exchange are incredibly generous. The sliding-scale subsidies are a function of income. The most a low-income family earning just above 100 percent of the federal poverty level has to pay is 2 percent of its income. A family earning 400 percent of the poverty level will pay no more than 9.5 percent. Because premiums are higher for older workers, older workers will receive larger subsidies than younger workers.

Moreover, private plans in the exchange will pay providers about 50 percent higher fees than the rock bottom payments they would have gotten from Medicaid. [See Appendix Table III and Figure VI.] This will be a huge relief for safety net facilities that are scraping by on inadequate resources as it is. And it is a reason why the CBO may have underestimated how many states will find this option very attractive.51

Medicaid Expansion Will Bust State Budgets

Medicaid rolls will increase regardless of whether states choose to expand Medicaid eligibility. For instance, a report for the state of Idaho found state Medicaid rolls were likely to increase 5 percent to 10 percent even if income eligibility was not expanded.52  The projected increase was due to new Medicaid regulations in the ACA. For instance, provisions allow applicants to ignore up to 5 percent of income (that is, income offset) when qualifying for Medicaid. Other provisions modify the definition of adjusted gross income, eliminate the asset test and loosen the definition of household for purposes of determining Medicaid eligibility. Administrative changes streamline the enrollment process and make it easier to determine eligibility.53

Another factor that will increase Medicaid rolls are those uninsured individuals who already qualify for Medicaid but have not enrolled. Various sources estimate that 10 million to 13 million uninsured people were already eligible for Medicaid prior to passage of the ACA.54 

When the individual mandate to obtain health coverage takes effect in 2014, many of the Medicaid-eligible uninsured are likely to be swept up in outreach efforts. The cost of covering all them will be expensive. A good example of this is Texas, which will have one of the biggest Medicaid-eligible populations in the nation. The Texas Department of Health and Human Services predicts that a decade after the ACA’s implementation, Medicaid rolls will rise by 2.4 million people.55 Of these, only 1.5 million enrollees will be newly eligible. About 824,000 individuals will be those previously eligible but not enrolled.56 The federal government will contribute a much smaller share of the cost of these previously eligible enrollees compared to newly eligible enrollees.57

Cato Institute scholar Jagadeesh Gokhale looked at the effect the Affordable Care Act would have on Medicaid budgets in more populous states.58 He found that the ACA would boost state government spending despite generous federal payments. According to Gokhale:59

Medicaid spending from general revenue in Texas would double — from $8.5 billion in 2008 to $18 billion by 2020 and $32.5 million by 2030.

California’s spending would rise from $19.4 billion in 2008 to just over $35 billion in 2020.

Medicaid spending in Florida would double from just over $6 billion to nearly $13 billion.

Medicaid spending from general revenue in New York state would rise from $24 billion in 2008 to $33 billion in 2020 and to $37 billion in 2030.

A Better Medicaid Program: Block Grants

What about Americans with incomes below 100 percent of poverty who are not now eligible for Medicaid? Strangely, the health reform law does not permit them to enroll in a health insurance exchange. If states decline to expand Medicaid to cover them, these folks will be left in a no-man’s land, unable to obtain either private or public insurance!

Making Medicaid More Flexible. For those individuals earning more than 100 percent of poverty, subsidized private coverage in the health insurance exchange is a much better deal for both states and enrollees. However, the question then becomes what to do about those earning less than 100 percent of the poverty level. Again, states should refrain from implementing the cookie-cutter approach envisioned by the architects of the Affordable Care Act. Instead, states should ask for block grants to create Medicaid programs that meet each state’s unique needs. A block grant would reduce the perverse incentives to engage in wasteful spending. It would also let states experiment and tailor programs to better serve their constituents.60

Medicaid is the largest expense item in most state budgets — and it is growing at unsustainable rates.

For instance: [see Figure VII]:

State Medicaid spending was only $84 billion in 2000, compared to $130 billion in 2009.

It is projected to quadruple to $357 billion by 2020 — less than a decade from now.

Federal spending on Medicaid was about one-quarter of a trillion dollars in 2009.

Federal spending is projected to more than double by 2020 to $574 billion. The primary reason behind the rapid growth in Medicaid expenditure is that the federal government encourages states to spend by providing a federal matching rate for all state spending on approved Medicaid services. In economic terms, this is referred to as subsidizing at the margin — each marginal dollar spent only costs states such as New York $0.50 cents, but only about $0.27 cents for each dollar spent in Mississippi. That states’ spending of about 43 cents is matched by nearly 57 cents of federal money is a perverse incentive that drives up Medicaid spending. States are tempted to go for the matching funds even when they know the spending is wasteful.61

Medicaid’s perverse incentives can be changed by removing matching federal funds. States that are content with the current system could continue with budgets that they negotiate with the federal government. The federal government should replace 50 separate state programs with one block-grant program, where innovation and experimentation is not only welcomed, but encouraged. Federal block grants combine several aid programs into a single payment given to each state according to a formula. These block grants remove much of the federal control and interference from the allocation of funds and allow the states more flexibility in their spending and better control over state-specific priorities.

Converting Medicaid into block grants could slow Medicaid’s growth. Armed with the flexibility to truly experiment, states could use federal block grants to improve and better serve the needs of Medicaid enrollees.62

State would also have more incentive to police their programs and cut wasteful spending. When half of states’ Medicaid budgets are paid for by federal matching funds, states only have half the incentive to eradicate fraud and look for ways to eliminate waste in the program. For instance, under the current matching formula, states have little incentive to verify the eligibility of applicants.

Conclusion

Medicaid comprises more than one of every five dollars spent by states — and is growing at unsustainable rates. States would be better served by freeing those earning above 100 percent of the federal poverty level to seek subsidized coverage in the health insurance exchanges. For families earning less than 100 percent of poverty, states should apply for block grants to tailor their Medicaid programs in ways that make sense for each state’s unique needs. State budgets, hospital budgets and patients themselves will be better off if low-income families enroll in private coverage rather than coverage through Medicaid.

 

 

 

 

Endnotes

1. Mary Beth Musumeci, “A Guide to the Supreme Court’s Affordable Care Act Decision,” Kaiser Family Foundation, July 2012. Available at http://www.kff.org/healthreform/upload/8332.pdf. Also see I. Glenn Cohen and James F. Blumstein, “The Constitutionality of the ACA’s Medicaid-Expansion Mandate,” New England Journal of Medicine, Vol. 366, No. 2, January 12, 2012, pages 103-104.

2. An exception is made for low-income workers whose employer health plan costs more than 9.5 percent of their wages and is therefore deemed unaffordable.

3. Mary Beth Musumeci, “A Guide to the Supreme Court’s Affordable Care Act Decision,” Kaiser Family Foundation, July 2012. Available at http://www.kff.org/healthreform/upload/8332.pdf.

4. Mary Beth Musumeci, “A Guide to the Supreme Court’s Affordable Care Act Decision.” Also see I. Glenn Cohen and James F. Blumstein, “The Constitutionality of the ACA’s Medicaid-Expansion Mandate,” New England Journal of Medicine, Vol. 366, No. 2, January 12, 2012, pages 103-104.

5. Health plans are deemed “affordable” if an employee’s contributions do not cost more than 9.5 percent of wages.

6. Mary Beth Musumeci, “A Guide to the Supreme Court’s Affordable Care Act Decision.”

7. This is a subject of intense debate. See Robert Pear, “Administration Advises States to Expand Medicaid or Risk Losing Federal Money,” New York Times, October 2, 2012.

8. “Total Medicaid Spending FY2010,” StateHealthFacts.org. Available at http://www.statehealthfacts.org/comparemaptable.jsp?ind=177.

9. John C. Goodman and Devon M. Herrick, “Reforming Medicaid: More Flexibility for the States,” National Center for Policy Analysis, Brief Analysis No. 515, May 13, 2005. Available at http://www.ncpa.org/pub/ba515.

10. The law allows individuals to exclude up to 5 percent of income, making the 133 percent of poverty cutoff effectively 138 percent of poverty.

11. Jessica Banthin, Holly Harvey and Jean Hearne, “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision,” Congressional Budget Office, July 2012. Available at http://cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf.

12. Ibid.

13. “Health Insurance Coverage of the Total Population, States (2009-2010), U.S. (2010),” StateHealthFacts.org. Available at http://www.statehealthfacts.org/comparetable.jsp?typ=1&ind=125&cat=3&sub=39.

14. “Medicaid Enrollment by State,” Medicaid.gov. Available at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html.

15. Carmen DeNavas-Walt, Bernadette D. Proctor and Jessica C. Smith, “Income, Poverty, and Health Insurance Coverage in the United States: 2011,” Current Population Reports, pages 60-243, Census Bureau, U.S. Department of Commerce, September 2012. Available at http://www.census.gov/prod/2012pubs/p60-243.pdf.

16. Michael Davern et al., “An Examination of the Medicaid Undercount in the Current Population Survey: Preliminary Results from Record Linking,” Health Services Research, Vol. 44, No. 3, June 2009, pages 965-987.

17. Pamela Villarreal and Michael Barba, “Update on Federal Medicaid Funding,” National Center for Policy Analysis, Brief Analysis No. 744, May 10, 2011. Available at http://www.ncpa.org/pub/ba744. Also see Linda Gorman, “Medicaid Block Grants and Consumer-Directed Health Care,” National Center for Policy Analysis, Issue Brief No. 102, September 2011. Available at http://www.ncpa.org/pdfs/ib102.pdf.

18. Ibid.

19. “Medicaid: An Overview of Spending on ‘Mandatory’ vs. ‘Optional’ Populations and Services,” Kaiser Family Foundation, June 2005. Available at http://www.kff.org/medicaid/upload/Medicaid-An-Overview-of-Spending-on.pdf.

20. StateHealthFacts.org, Kaiser Family Foundation. Available at http://www.statehealthfacts.org/comparecat.jsp?cat=4&rgn=6&rgn=1.

21. Pamela Villarreal and Michael Barba, “Update on Federal Medicaid Funding.”

22. Pamela Villarreal and Michael Barba, “Update on Federal Medicaid Funding.” See also StateHealthFacts.org, Kaiser Family Foundation.

23. Devon Herrick, “Medicaid Expansion will Bankrupt the States,” National Center for Policy Analysis, Brief Analysis No. 729, October 23, 2010. Available at http://www.ncpa.org/pub/ba729.

24. Richard S. Foster, “The Financial Outlook for Medicare, Medicaid, and Total National Health Expenditures,” testimony before the House Committee on the Budget, Office of the Actuary, Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services, February 28, 2012, page 13. Available at http://budget.house.gov/uploadedfiles/fostertestimony_2-28-22012.pdf. See also Stephen A. Somers et al., “Covering Low-Income Childless Adults in Medicaid: Experiences from Selected States,” Center for Health Care Strategies, Inc., Policy Brief, August 2010. Available at http://www.chcs.org/usr_doc/Medicaid_Expansion_Brief.pdf.

25. The administration opposes this. See Robert Pear, “Administration Advises States to Expand Medicaid or Risk Losing Federal Money,” New York Times, October 2, 2012. Available at: http://www.nytimes.com/2012/10/02/us/us-advises-states-to-expand-medicaid-or-risk-losing-funds.html.

26. Jennifer Lubell, “Small Practices May Be Least Able To Take New Medicaid Patients,” American Medical News, August 20, 2012.

27. Sandra L. Decker, “In 2011 Nearly One-Third Of Physicians Said They Would Not Accept New Medicaid Patients, But Rising Fees May Help,” Health Affairs, Vol. 31, No. 8, August 2012, pages 1673-1679.

28. Brent R. Asplin et al., “Insurance Status and Access to Urgent Ambulatory Care Follow-up Appointments,” Journal of the American Medical Association, Vol. 294, No. 10, September 14, 2005. Available at http://jama.ama-assn.org/cgi/content/abstract/294/10/1248.

29. “2009 Survey of Physician Appointment Wait Times,” Merritt Hawkins and Associates, 2009. Available at http://www.merritthawkins.com/pdf/mha2009waittimesurvey.pdf.

30. Tamyra Carroll Garcia, Amy B. Bernstein and Mary Ann Bush, “Emergency Department Visitors and Visits: Who Used the Emergency Room in 2007?” Centers for Disease Control and Prevention, National Center for Health Statistics, NCHS Data Brief No. 38, May 2010. Available at http://www.cdc.gov/nchs/data/databriefs/ db38.pdf.

31. Arthur L. Kellermann and Robin M. Weinick, “Emergency Departments, Medicaid Costs, and Access to Primary Care — Understanding the Link,” New England Journal of Medicine, Vol. 366, No. 23, June 7, 2012, pages 2141-2143. Available at http://www.nejm.org/doi/full/10.1056/NEJMp1203247.

32. Devon Herrick, “Uninsured Emergency Room Use Greatly Exaggerated,” Health Care News, July 7, 2010. Available at http://www.ncpa.org/commentaries/uninsured-emergency-room-use-greatly-exaggerated-health-care-news.

33. Tamyra Carroll Garcia, Amy B. Bernstein and Mary Ann Bush, “Emergency Department Visitors and Visits: Who Used the Emergency Room in 2007?”

34. Avik Roy, “UVA Study: Surgical Patients on Medicaid Are 13 Percent More Likely to Die Than Those Without Insurance,” National Review, July 17, 2010. Available at http://www.nationalreview.com/critical-condition/231147/uva-study-surgical-patients-medicaid-are-13-more-likely-die-those-without-.

35. Damien J. LaPar et al., “Primary Payer Status Affects Mortality for Major Surgical Operations,” presentation to the 130th Annual Meeting of the American Surgical Association, 130th Annual Meeting Abstracts, April 2010. Available at http://www.americansurgical.info/abstracts/2010/18.cgi.

36. Richard G. Roetzheim et al., “Effects of Health Insurance and Race on Early Detection of Cancer,” Journal of the National Cancer Institute, August 18, 1999. Available at http://jnci.oxfordjournals.org/cgi/content/full/91/16/1409?ijkey=3894238ad956b166ab570c56f9648d625979f6d4.

37. Rachel Rapaport Kelz et al., “Morbidity and Mortality of Colorectal Carcinoma Surgery Differs by Insurance Status,” Cancer, Vol. 101, No. 10, November 15, 2004, pages 2187-2194. Available at http://www.ncbi.nlm.nih.gov/pubmed/15382089.

38. Jeannine K. Giacovelli et al., “Insurance Status Predicts Access to Care and Outcomes of Vascular Disease,” Journal of Vascular Surgery, Vol. 48, No. 4, October 2008, pages 905-911. Available at http://www.ncbi.nlm.nih.gov/pmc/ articles/PMC2582051/?tool=pubmed.

39. Richard B. Smith et al., “Medicaid, Hospital Financial Stress, and the Incidence of Adverse Medical Events for Children,” Health Services Research, Vol. 47, No 4, August 2012. Available at http://www.hsr.org/hsr/abstract.jsp?aid=47903270811.

40. John C. Goodman, “Medicaid Is Worse than Being Uninsured,” John Goodman’s Health Policy Blog, March 10, 2011. Available at http://healthblog.ncpa.org/medicaid-is-worse-than-being-uninsured/.

41. John Sheils, “The Cost and Coverage Impacts of a Public Plan,” testimony before the Ways and Means Committee, Lewin Group, April 29, 2009. Available at http://www.lewin.com/~/media/lewin/site_sections/publications/testimonyapril292009.pdf.

42. “Medicaid-to-Medicare Fee Index, 2008,” StateHealthFacts.org, Kaiser Family Foundation. Available at http://www.statehealthfacts.org/comparetable.jsp?ind=196&cat=4. Also see Stephen Zuckerman, Aimee Williams and Karen Stockley, “Medicaid Physician Fees Grew by More Than 15 Percent From 2003 to 2008, Narrowing Gap With Medicare Physician Payment Rates,” Health Affairs, April 2009. Available at http://www.kff.org/medicaid/kcmu042809oth.cfm.

43. David Cutler and Jonathan Gruber “Does Public Insurance Crowd Out Private Insurance?” Quarterly Journal of Economics, Vol. 111, No. 2, May 1996, pages 391-430.

44. N.C. Aizenman, “Texas counties consider going it alone on Medicaid expansion,” Washington Post, August 26, 2012. Available at http://www.washingtonpost.com/national/health-science/texas-counties-consider-going-it-alone-on-medicaid-expansion/2012/08/26/f35686dc-e322-11e1-98e7-89d659f9c106_story.html.

45. The Texas Health & Human Services Commission estimates that less than 50 percent of those newly eligible for Medicaid will enroll.

46. Benjamin D. Sommers and Sara Rosenbaum, “Issues In Health Reform: How Changes In Eligibility May Move Millions Back And Forth Between Medicaid And Insurance Exchanges,” Health Affairs, Vol. 30, No. 2, February 2011, pages 228-236.

47. Author’s calculations based on data at StateHealthFacts.org, Kaiser Family Foundation.

48. Robert Pear, “Administration Advises States to Expand Medicaid or Risk Losing Federal Money,” New York Times, October 2, 2012. Available at http://www.nytimes.com/2012/10/02/us/us-advises-states-to-expand-medicaid-or-risk-losing-funds.html.

49. Jessica Banthin, Holly Harvey and Jean Hearne, “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision,” Congressional Budget Office, July 2012, Table I. Available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf.

50. Provisions in the Affordable Care Act also limit cost-sharing for low-income individuals and families to no more than 6 percent of a health plan’s actuarial value. States could elect to subsidize the remaining portion of cost-sharing as well.

51. John C. Goodman, “The Supreme Court May Have Saved Lives,” John Goodman’s Health Policy Blog, Health Alert, July 30, 2012. Available at http://healthblog.ncpa.org/the-supreme-court-may-have-saved-lives/.

52. “Idaho’s Newly Eligible Medicaid Population: Demographic and Health Condition Information,” Leavitt Partners, September 18, 2012. Available at http://www.healthandwelfare.idaho.gov/Portals/0/Medical/MedicaidCHIP/0918%20Idaho%20Medicaid%20Leavitt%20Report.pdf.

53. Nicole Huberfeld, Elizabeth Weeks Leonard and Kevin Outterson, “Plunging into Endless Difficulties: Medicaid and Coercion in the Healthcare Cases,” Boston University School of Law, Working Paper No. 12-40, August 14, 2012. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2128760.

54. For instance, one publication estimates that one-third (nearly 15 million people) may qualify for public coverage but are unenrolled. See “The Uninsured in America,” BlueCross BlueShield Association, Publication W20-04-035, January 2005. Available at http://coverageforall.org/pdf/BC-BS_Uninsured-America.pdf.

55. This assumes Texas’ Medicaid eligibility conforms to the ACA and most of those eligible for Medicaid enroll.

56. Thomas M. Suehs, “Federal Health Care Reform — Impact on Texas Health and Human Services,” Texas House Select Committee on Federal Legislation, April 22, 2010.

57. Martha Heberlein, Jocelyn Guyer and Robin Rudowitz, “Financing New Medicaid Coverage under Health Reform: The Role of the Federal Government and States,” Kaiser Family Foundation, May 2010. Available at http://www.kff.org/healthreform/upload/8072.pdf.

58. Jagadeesh Gokhale analyzed Texas Medicaid expansion for the National Center for Policy Analysis in the spring of 2012. Although the object of his analysis was different, portions of his methodology were later used in this analysis of 49 other states. Gokhale has not reviewed the methodology used in this report; any weaknesses are the responsibility of the author.

59. Jagadeesh Gokhale, “The New Health Care Law’s Effect on Medicaid Spending: A Study of the Five Most Populous States,” Cato Institute, 2011. Available at http://www.cato.org/pubs/wtpapers/StateMedicaidSpendingWP.pdf.

60. Linda Gorman, “Medicaid Block Grants and Consumer-Directed Health Care,” National Center for Policy Analysis, Issue Brief No. 102, September 15, 2011. Available at http://www.ncpa.org/pub/ib102.

61. John C. Goodman and Devon M. Herrick, “Reforming Medicaid: More Flexibility for the States.”

62. Ibid.


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