What is the counterfactual?
That is the critical question in evaluating any policy. What are the policy outcomes being compared against? Is the counterfactual current law/current guidance of the law? Is the counterfactual current local policy? Is the counterfactual something else? These are all valid counterfactuals for a variety of questions. Choosing one counterfactual over another sometimes will not matter. Sometimes it matters a great deal.
It matters a great deal when analyzing the implications of Medicaid Partial Expansion. The relevant counterfactual will be different depending on the state. Massachusetts should have a counterfactual of current law of full expansion while Georgia should have a counterfactual of current law and local policy of no expansion. Utah is a special case and I’m not sure what the right counterfactual is.
Why does this matter?
Healthcare Dive is highlighting a report from the Kaiser Family Foundation:
Partial Medicaid expansion with Affordable Care Act matching funds could limit state spending, but it will come at the cost of fewer people insured than full Medicaid expansion, according to the Kaiser Family Foundation.
Yes, partial Medicaid expansion will cover fewer people than full Medicaid expansion. If that is not the case, someone is doing partial wrong. But is that the relevant counterfactual in states like Georgia or Tennessee?
I don’t think it is the right counterfactual.
Right now, it does not look like full expansion of Medicaid to adults earning no more than 138% federal poverty level(FPL) is on the table. The choice set is either a change in current policy in the form of a partial expansion of Medicaid to adults earning up to 100% FPL or no change in policy. No change in policy means people earning over 100% FPL and less than 138% FPL still qualify for exchange subsidies and out of pocket assistance. No change in policy means there is significant friction on enrollment that keeps people in this cohort from being continually covered. No change in policy means that almost everyone who earns under 100% FPL will not be exchange assistance eligible and many will not be able to be eligible for Medicaid. That, I think, is the relevant counterfactual for current non-expansion states.
Now for states that have already fully expanded Medicaid but would like to off load some costs back to the Federal government in the form of a partial expansion of Medicaid, current policy and current law is the relevant counterfactual.
Determining the right counterfactual determines the questions which determines the answers one gets. Getting the counterfactual right is critical.