For many uninsured Americans, Medicaid expansion is critical: States’ decisions have lifesaving impact
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* Kim Krisberg

Health officials in Washington have been working to revamp and expand the state’s Medicaid program since passage of the Affordable Care Act in 2010. It is a complex undertaking, expected to bring more than 300,000 residents into the coverage fold.

![Figure1](http://www.thenationshealth.org/http://www.thenationshealth.org/content/nathealth/42/9/1.1/F1.medium.gif)

[Figure1](http://www.thenationshealth.org/content/42/9/1.1/F1)

Registered dental hygienist Denise Lopez-Rodriguez cleans Laura Breland’s teeth in March at a community health center in Aurora, Colo., that accepts patients with Medicaid. States across the nation are debating whether to expand their Medicaid programs as specified under the Affordable Care Act.

Photo by John Moore, courtesy Getty Images

“We’re talking about a whole new world of Medicaid and, as I like to tell those of us trying to build something within very challenging and short time frames, remember that we’re making history here,” said Manning Pellanda, assistant director for eligibility policy and service delivery at the Washington State Health Care Authority. “When we get this up and running, we’ll be making a real difference in someone’s life.”

Washington is one of only a few states that got an early start expanding Medicaid in accordance with the health reform law, which required states expand Medicaid to cover most adults younger than 65 with incomes at or below 133 percent of the federal poverty level starting in 2014. However, June’s Supreme Court decision on the law ruled that the federal government cannot financially penalize states for not expanding Medicaid. The decision means some states may not expand, throwing a wrench into work to cover some of the nation’s poorest citizens.

The Congressional Budget Office had originally estimated that by 2022, the expansion would bring 17 million additional adults and children into Medicaid and the Children’s Health Insurance Program. After the court’s ruling, that estimate is down to 11 million, based on the assumption that some states will not expand.

“The Affordable Care Act intended the Medicaid expansion to extend coverage to the nation’s lowest income individuals and families,” said Vanessa Forsberg, MPP, an APHA public health policy analyst. “But subsidies for insurance purchased via state-based exchanges will only be available for people with incomes between 100 percent and 400 percent of the federal poverty limit. So in states that don’t expand Medicaid eligibility, there will be a gap in access to affordable coverage.”

For people in that gap without employer-sponsored coverage, their health care experience will not change much, said Alan Weil, JD, MPP, executive director of the National Academy for State Health Policy. Many will continue accessing safety net programs and receiving uncompensated care — or go without, in some cases. Fortunately, most states are now expected to expand Medicaid.

“No one was thinking about this as an option until the court made it one, so the out-of-the-box response was along fairly predictable political lines,” he told *The Nation’s Health*. “But as providers and payers start weighing in…we’re seeing an evolution in the response as we move past the political knee-jerk reaction.”

From a purely financial standpoint, the expansion is “certainly the best deal that states have ever been offered,” said Weil, referring to the fact that the federal government will pay 100 percent of the cost of newly eligible beneficiaries in the first three years and no less than 90 percent thereafter. In addition, he said, expanding Medicaid is an opportunity to improve health outcomes.

According to a study published in September in the *New England Journal of Medicine* that examined Medicaid eligibility expansion in Arizona, Maine and New York, the decision resulted in significant reductions in mortality, especially among adults ages 35 to 64, minorities and residents of poor counties. The expansions were also associated with better access to care and better self-reported health, the study found. Benjamin Sommers, MD, PhD, a co-author of the study and assistant professor of health policy and economics at the Harvard School of Public Health, said it is reasonable to expect a similar impact under the Affordable Care Act’s Medicaid expansion.

“If some states choose not to expand, I hope they’ll be mindful to keep their safety net programs intact,” Sommers told *The Nation’s Health*. “And even if (states expand) there will still be a need for uninsured care and having a safety net in place will be really important.”

Because the Affordable Care Act assumed Medicaid expansion would happen nationwide, the law slowly decreases “disproportionate share” payments to hospitals meant to cover uncompensated care. That decrease, coupled with a state’s decision against expansion, could result in even fewer options for the uninsured than before. In Texas, home to the nation’s highest uninsured rate and a governor who has stated he has no intention of expanding Medicaid, “the poorest of our insured would be in the same boat as they are now,” said Anne Dunkelberg, MPA, associate director of Austin’s Center for Public Policy Priorities.

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[Figure2](http://www.thenationshealth.org/content/42/9/1.1/F2)

Pharmacy director Hank Wedemeyer fills prescriptions at a community health center in Aurora, Colo., in March. Prescription drugs are covered under state Medicaid plans, though the number and types of drugs covered vary from state to state.

Photo by John Moore, courtesy Getty Images

“Having some financial security around health care is a huge potential building block for joining the middle class and staying in the middle class,” she said. “This is huge in terms of families just being able to get by. It provides the kind of increased security that lets families put money into other important things, like saving money for college and buying a house.”

George Hernandez, JD, president and CEO of University Health System in San Antonio, said he hopes Texas will expand Medicaid. But absent that, he said stakeholders in Bexar County are exploring the possibility of expanding Medicaid at the county level. Hernandez pointed to the simple economics of expansion: CareLink, the health system’s financial assistance program to help low-income residents access care, has about 55,000 members at a cost of $2,000 per member per year. Hernandez said that about half those residents would qualify for Medicaid if it expanded, resulting in $53 million in savings.

At Central Health, the Travis County, Texas, health care district, President and CEO Patricia Young Brown said the district serves thousands of uninsured adults with multiple chronic health conditions who would benefit from better coordinated care and access that comes with expanding Medicaid. Central Health’s 2013 budget for uncompensated care is about $117 million, Brown said, noting that many residents who now access the district’s services would be eligible for an expanded Medicaid program — “it certainly would contribute to the cost of care and then those funds could be used to expand services.”

In Washington state, enrollment in the newly expanded Medicaid program will begin Oct. 1, 2013. Pellanda said “we know there’s a pent-up demand out there” for health care access, and officials are hoping to enroll residents early to take full advantage of the high federal matching rate that starts in 2014.

One of the biggest challenges, however, is revamping how people enroll in Medicaid, a process that states have to undertake whether their programs expand or not. States must build a consumer-friendly enrollment system that can easily and efficiently determine and verify residents’ eligibility for Medicaid, CHIP and insurance subsidies in real time. It is an enormous undertaking, said Pellanda, noting that “even though we’re challenged by the short runway that we have to get to that point and all the bells and whistles may not be there at first, we will have successful implementation.”

For more information, visit [www.nashp.org](http://www.nashp.org) or [www.apha.org/advocacy/Health+Reform](http://www.apha.org/advocacy/Health+Reform).

*   Copyright The Nation’s Health, American Public Health Association