Category: Medicaid

After Almost One Year, Some Medicaid Applicants Still Not Enrolled

man-in-wheelchairWell, there is progress. In June, we discussed the three million people who were funneled into Medicaid by Obamacare’s exchanges, but had still not been enrolled. As of October, the backlog is down to a few hundred thousand.

California and Tennessee are facing lawsuits from residents who say they have seen long delays for coverage after signing up for Medicaid, the federal-state health program for the low income and disabled. Some say they have been waiting since late 2013.

The delays stem from various technical problems and the sheer volume of Medicaid applications states must process.

Oregon Research Confirms Medicaid Increases ED Use

In 2013, many were surprised to learn that Oregon’s Medicaid expansion did not improve health outcomes. Subsequent research on the same data, published this year, found that low-income, uninsured adults newly covered by Medicaid go to the ER more, not less. As seen in the chart below (reproduced from the article), new Medicaid dependents increased their ED  visits by approximately 40% relative to those who did not enroll. This corroborates what hospitals are starting to admit.

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Source: Straining Emergency Rooms by Expanding Health Insurance from Policy Forum.

Here’s Why States Can’t Make Money by Expanding Medicaid

Obamacare encourages states to expand significantly the number of their residents dependent on Medicaid, the joint state-federal program for low-income households. It significantly increases federal funding for expanding this dependency. However, the Supreme Court has declared that the states do not have to accept this expansion.

So, the Administration and its allies have been reduced to arguing that expanding Medicaid is sort of a profit center for states that do it. The President’s Council of Economic Advisers has enthused about how many jobs would be created if hold-out states just accepted the federal hand-out. (The Robert Wood Johnson Foundation has recently produced a report that beats a similar drum.)

Another Bogus Attack on Wisconsin Medicaid

The Wisconsin Legislative Fiscal Bureau analysis estimates the state is losing about $100 million a year by not expanding its Medicaid eligibility as much as allowed under the Patient Protection and Affordable Care Act (ACA). This mudslinging by Wisconsin Governor Scott Walker’s gubernatorial challenger is disingenuous and ignores the fact that Wisconsin made a better choice by allowing many of its low-income uninsured to access private coverage with federal subsidies.

Over the past several years state legislators have grappled with the pros and cons of Medicaid expansion under the ACA. The carrot dangled in front of state legislators is financial; states that agree to expand Medicaid eligibility to 138 percent of the federal poverty level (FPL) can expect the federal government to reimburse states for most of the cost for newly eligible enrollees. Critics of Medicaid expansion counter that the savings are front-loaded in the early years, whereas state costs begin to rise in later years when it’s too late for states to back out. Whereas the federal government will pay 100 percent of the costs through 2016, the feds begin ratcheting the matching rate down to 90% by 2019.

Medicaid Patients Use the ER Because They Have To, Not Because They Want To

It is well established that Medicaid patients use emergency rooms more than either uninsured or privately insured patients. What has been debated is whether their use of the ER is necessary or unnecessary. Well, it turns out that that depends on how you look at it. Obviously, not many people go to the ER because they enjoy the experience and have nothing better to do. However, medical problems that cause them to go to the ER could often be dealt with in a doctor’s office.

The Medicaid and CHIP Payment and Access Commission (MACPac) has just published a review of articles examining why Medicaid patients frequent the ER so much:

The majority of ED visits by non-elderly Medicaid patients are for urgent symptoms and serious medical problems that require prompt medical attention…

7.2 Million More Americans Dependent on Medicaid since Obamacare Opened

The Center for Medicare & Medicaid Services (CMS) has just released more data corroborating our previous conclusion that Obamacare is mostly an expansion of welfare dependency:

The 48 states reporting both June 2014 enrollment data and data from July-September 2013 report total enrollment in June of over 65 million individuals, and July-September 2013 average enrollment of 58 million. For June 2014, we are reporting growth of 7.2 million compared to July-September 2013…

What is really remarkable is that the government thinks this is something to be proud of. It is a far greater number than the increase in those enrolled in individual plans (even with Obamacare subsidies), and will impose a significant drag on employment growth as long as Obamacare’s Medicaid expansion persists.

Medicaid’s Perverse Financing Merry-Go-Round

health-insuranceMedicaid, which provides health-related welfare benefits to low-income individuals, is jointly financed by the federal and state governments. Before Obamacare, the split was 50/50 for rich states, but low-income states got more dollars. This mechanism is called the Federal Medicaid Assistance Percentage (FMAP). So, if California spent $50 on Medicaid, the federal taxpayer would chip in $50. However, for West Virginia, the split is 28.65/71.35. That is, for every hundred dollars spent on Medicaid, only $28.65 is spent by the state, and $71.35 comes from federal taxpayers. These dollars are not appropriated by Congress: They just roll out on auto-pilot, as calculated by the FMAP.

Obamacare Enrollment is Mostly Medicaid Expansion

The Urban Institute produces a quarterly survey of Obamacare enrollment. The latest corroborates that Obamacare enrollment is largely an increase in Medicaid dependency. Let me start off by repeating the same criticism I have made of the Gallup-Healthways survey. Namely, that this survey does not differentiate between people who were uninsured for one month before signing up for Obamacare and those who were uninsured for twelve months. This leads to a too high baseline measurement of the uninsured.

Nevertheless, there is a reduction in the proportion of uninsured, and it is much larger in states that expanded Medicaid than in states that did not [Figure 1]:

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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.

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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.