More than 2 million people could be covered under Medicaid expansion

Photo: Jose Luis Pelaez/Getty Images

More than two million people would gain healthcare coverage in 2024 if 10 states were to expand Medicaid eligibility, finds a new analysis from the Urban Institute and the Robert Wood Johnson Foundation.

To date, all but 10 states have expanded Medicaid eligibility under the Affordable Care Act. The holdouts – Alabama, Georgia, Florida, Kansas, South Carolina, Tennessee, Texas, Wisconsin and Wyoming – have yet to expand it. But if they did, an estimated 2.3 million people would gain access to health coverage, and the national uninsurance rate would be lowered to below 25%.

Under the ACA, states have the option to expand Medicaid eligibility to non-elderly people with incomes up to 138% of the federal poverty level. States that have not expanded Medicaid have notably higher uninsured rates than expansion states, the numbers showed.

Groups with the highest gains in coverage because of Medicaid expansion include non-Hispanic Blacks, young adults and women, particularly women of reproductive age. The federal government would pay 90% of the costs of newly eligible Medicaid enrollees. Although states would have to pay the remaining 10%, Medicaid expansion gives states opportunities to reduce current spending and increase revenue, with an analysis showing that Medicaid expansion had a net positive impact on many state budgets.

WHAT'S THE IMPACT?

If non-expansion states did decide to expand Medicaid, federal spending on Medicaid and the Marketplaces in these states would increase by about $24 billion, a 17.5% increase. This would be partially offset by $731 million in federal government savings on uncompensated care, data showed.

State spending on Medicaid in those states would increase by $1.5 billion, or 3%. This would be partially offset by $457 million in state and local government savings on uncompensated care.

The remaining state spending would be fully or largely offset by savings in other areas and potential new revenue. And for the first two years after a new Medicaid expansion, the federal government would pay a higher share of the costs of currently eligible Medicaid enrollees.

President Biden's budget for fiscal year 2024 would provide federally funded, "Medicaid-like" coverage to individuals not eligible for assistance because their state did not expand Medicaid. If the federal government were to provide Medicaid-like coverage through the Marketplaces to all of those who would gain Medicaid eligibility under expansion, analysts predict that the reduction in the number of uninsured would be the same as under Medicaid expansion.

The difference is that it would be federally funded, and those gaining eligibility would enroll in the Marketplaces. Analysts estimate that the federal government would spend nearly $8 billion more in 2024 under the president's proposal than if all states were to expand Medicaid, while states would spend $918 million less.

The analysis cited evidence that increased health coverage, whether Medicaid or "Medicaid-like," lowers mortality and increases the financial security of low-income families. It can also decrease the number of unwanted pregnancies and increase access to effective contraception, they said.

THE LARGER TREND

Medicaid expansion appears to be a boon to the Biden administration's push to improve maternal health, with a 17% decline in postpartum hospitalizations in states that elected to expand the federal program.

The results, published in Health Affairs, showed this reduction in hospitalizations held for the first 60 days postpartum, and there was some evidence of a smaller decrease in hospitalizations between 61 days and six months postpartum.

Since hospitalizations are evidence of health issues that intensify to the point of requiring an inpatient hospital stay, the results provide evidence that Medicaid expansion is beneficial for the health of those who have just given birth, the authors said.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com