Category: Medicaid

Is Medicaid Crowd-Out the Only Effect of Obamacare?

Medicaid “crowd-out” is the hypothesis that enrolling more people in Medicaid will cause some people to drop private coverage in favor of Medicaid. Historical analyses of this effect come to a wide range of estimates, as Linda Gorman discussed in a recent blog entry.

Now courtesy of the Robert Wood Johnson Foundation (RWJF), we have evidence that the entire effect of Obamacare so far is to crowd out private coverage. The RWJF report further confuses the consequences of Obamacare on coverage and access to care. This is not the RWJF’s fault: The emerging evidence on Obamacare is a jumble of contradictions. In this instance, the report insists that physicians saw no increase in patient demand after Obamacare, as demonstrated in Figure 2. More sophisticated metrics showed that the complexity of patients’ needs also did not increase after Obamacare.


The Mystery of Hospitals’ Medicaid Profitability: Evidence from Arizona

Advocates of consumer-driven health reform want to shrink the role of government. One of the things we want is for Medicaid dependents to have greater choice of coverage, perhaps even through vouchers or tax credits that would allow them to choose private coverage. We know that Medicaid patients face poor access to care and that increasing the number of people on Medicaid increases emergency-department use. And yet, it has also been argued that hospitals lose money on Medicaid patients. However, this cannot make sense because hospitals constantly lobby to expand Medicaid. They never join with proposals to move Medicaid patients to private coverage. This is especially baffling because scholars also believe that some proportion of people who take advantage of a Medicaid expansion drop private coverage to take up Medicaid.

Evidence from Arizona leads to an explanation. Arizona hospitals heavily lobbied Governor Brewer to expand Medicaid in line with Obamacare. This expansion resulted in a reduction in so-called “uncompensated costs” from about 8 percent of hospitals’ revenue in the summer of 2013 to under 5 percent in April 2014. As well, Arizona hospitals operating margin increased from $140 million for 2013 to date to $184 million for 2014 to date, an increase in operation margin from 4.0 percent to 5.2 percent.

Puzzle of the Day: Medicaid Expansion and Unavoidable Emergency Department Visits

Ambulance at Emergency EntranceTo paraphrase John Wayne, evaluating health care is hard. It is even harder if you use percentages.

A 2011 report on whether or not Wisconsin’s BadgerCare’s coverage of childless adults affected their utilization of services concluded that people in a sample of about 10,000 very low income childless Milwaukee adults increased their total emergency department visits by 39 percent when they were newly enrolled in Medicaid coverage.

Seventeen percent of visits resulted in a hospital admission before Medicaid was expanded to cover the group. After expansion, 9.5 percent of emergency department visits resulted in a hospital admission.

The report spins this like it was a good outcome: “This significant 45% decline is notable in that Wisconsin Medicaid payment policy considers an ED visit ‘appropriate’ when it results in a hospital admission.” Later on, the report reminded readers that “the percentage of hospital admissions from the emergency department declined dramatically.”

Medicaid Spending More Than Doubled, 1999-2010

Sometimes a picture tells a thousand words. And this growth in Medicaid dependency happened mostly during a Republican Administration, well before ObamaCare’s expansion. And the trend from 2006 through 2010 is straight. That is, the 2008 financial crisis and subsequent recession did not cause the expansion. It’s just what our government does, apparently.


Yet More Reasons Why Doctors Do Not Participate in Medicaid

Claims about Medicaid’s effectiveness should be approached with caution simply because the population covered by Medicaid differs from that covered by private insurance in ways a variety of ways that are likely to affect overall health.

For example, Medicaid patients are more likely to be no-shows for medical appointments. No-shows are typically defined as either not showing up at all or calling to cancel on the same day. In one orthodontic practice, Medicaid patients accounted for almost 40 percent of missed appointments but only 27 percent of all appointments. Children most likely to miss dental visits were those with lots of cavities, poor behavior, multiple missed appointments, and no phone.

Broken appointments translate into a reimbursement rate of zero. Surveys of dentists suggest that they are even more important than low reimbursements in dentists’ refusal to participate in Medicaid.

The pattern does not change for more involved procedures like cochlear implants. At Children’s Hospital in Cleveland, Ohio, access to cochlear implants is the same whether patients are covered by Medicaid or by private insurance. But medical complications do vary with a patient’s insurance status. From 1996 to 2008, 133 children received unilateral cochlear implants. Complications in Medicaid-insured children were 5 times those in privately insured patients with 10 complications in 51 Medicaid-insured patients and 3 complications in 61 privately insured patients. Medicaid patients missed 35 percent of follow-up appointments. Privately insured patients missed 23 percent of follow-up appointments.

Given that behavioral differences exist for something as simple as keeping an appointment, challenges to getting high-quality care to Medicaid patients cannot be solved by just expanding Medicaid budgets.

Three Million People Who Applied for Medicaid During the ObamaCare Surge are Still Waiting to be Enrolled

health-insuranceThe survey’s estimate of at least 2.9 million unprocessed applications is a conservative tally because some states didn’t furnish all of the requested information.

Thirty-six states rely on the federal insurance site to transmit applications of people federal officials believe will qualify for Medicaid. Six of those states provided CQ Roll Call with the number of applications still stuck at the federal marketplace but couldn’t say how many people were covered. Eleven offered numbers for pending applications that had been transferred but similarly didn’t know the number of individuals covered in the paperwork.

It’s also important to note that the 2.9 million estimate is for the number of people waiting for their initial application to be processed. Some recipients waiting for a decision reapplied directly to the states and were approved. Officials in many states will have to spend additional sums to weed out duplicate applications and eliminate the risk of double-counting. (Roll Call)

ObamaCare’s Medicaid Expansion is a Bad Deal for States

Medicaid is the single largest component of state expenditures, accounting for 23.5 percent of the $1.7 trillion spent by states in 2013.

Largely as a consequence of the ACA, state and local spending for Medicaid is projected to nearly double over the next decade.

(Joe Antos, American Enterprise Institute)

Medicaid Patients’ Access to Physicians Has Dropped Almost One Fifth in Five Years

According to a Merritt Hawkins’ 2014 survey of the proportion of physicians in five specialties (cardiology, dermatology, orthopedic surgery, ob/gyn, and family practice) accepting Medicaid patients dropped from 55.4 percent in 2009 to 45.7 percent — a drop of almost one fifth.

This decline under the Obama administration contrasts with some improvement in Medicaid patients’ access during the second term of the Bush administration: Merritt Hawkins’ 2004 survey reported that 49.8 percent of physicians accepted Medicaid patients.

Merritt Hawkins also asked physicians if they were willing to accept Medicare patients: Only 76 percent said yes. In Minneapolis, only 38.2 percent of physicians were willing to accept Medicare patients! (Unfortunately, the survey did not ask physicians if they accept private insurance.)

As in 2009, Boston had the longest waiting times to see specialists at 1 ½ months.

The table below shows the waiting times for physicians in ten cities surveyed in both 2014 and 2009:


Medicaid Expansion Caused Most of the Economic “Growth” in January and February

We’ve already noted that health spending last quarter climbed at the highest rate in ten years, according to the Bureau of Economic Analysis’ latest quarterly GDP report.

Ben Casselman of FiveThirtyEight puts that spending spurt in another context. Examining the BEA’s February income report, he concludes that Medicaid expansion explains most of the growth:

The government’s definition of income includes not just salaries and other cash payments but also non-cash benefits such as employer-paid health insurance premiums and government programs such as Medicare and Medicaid. The health law has a particularly big impact on that last category because it made millions more people eligible for Medicaid. As a result, Medicaid payments increased $11.4 billion in February, representing 24 percent of the total increase in income. In January, Medicaid benefits represented an even bigger 47 percent of the increase in income.

In other words, the Bureau of Economic Analysis does not take into account whether people earned their income, or whether it was a welfare payment.

How Bad is Medicaid?

This is from the latest MACPAC report:

  • Only 67.4 percent of primary-care physicians are accepting any new Medicaid patients, versus 85.2 percent accepting privately insured patients;
  • Only 68.8 percent of parents of children on Medicaid reported that providers spend enough time with their child, versus 85.6 percent of parents of privately insured children; and
  • Over three times as many children on Medicaid had two or more ER visits in the last twelve months than privately insured children (9.9 percent versus 3.2. percent).