Low income individuals who would not be insured in states that expanded Medicaid face a sharp discontinuity of what publicly subsidized health insurance program that they are eligible for at 138% Federal Poverty Level(FPL). Below that level, they are eligible for Medicaid. Above that level, they are only eligible for ACA Qualified Health Plans (QHP), including silver plans with Cost Sharing Reduction (CSR) subsidies. Does this matter? Is one better than the other?
A team led by Drs. Heidi Allen and Ben Sommers published a super awesome study in JAMA Open Networks yesterday that asked that question. They linked Colorado Medicaid data to the Colorado Exchange and then linked these universes to the Colorado All-Payers Claim Database for 2014-2015. They asked if there were differences in how people used case, how long people were covered and how much care cost. In order to get strong inference, they limited the universe to people who earned 138% FPL plus or minus 5 FPL points so that they are looking at people who barely qualified for Medicaid and who barely qualified for ACA plans.
What did they find?
Marketplace coverage was associated with fewer emergency department visits and more office visits than Medicaid, total costs were 83% higher in Marketplace coverage owing to much higher prices, and out-of-pocket spending was 10 times higher in Marketplace coverage; results for quality of care were mixed.
What does this mean?
Cost sharing “works” in moving people out of the ED and towards office visits. Other than that, on a cost-effectiveness grounds, we’re probably light on Medicaid and too heavy on private insurance. Someone in reasonably decent health who is earning 137% FPL and has the ability to take or decline one extra shift is probably better off on Medicaid than an Exchange plan as the monthly premiums and cost-sharing are significant.
From a policy perspective, allowing states to convert large chunks of their Exchange market up to 200% FPL through a Section 1331 Basic Health Plan could make sense. The BHP allows a state to get a 95% of ACA spending per-capita block grant to offer coverage through the program that is at least as good and at least as cheap. New York and Minnesota are the only states that do this. A BHP is the only waiver program in the ACA that increases federal funding as enrollment grows. New Mexico, and several other states, have considered Medicaid buy-in programs to allow people to purchase QHPS that are truly Medicaid plans on the Exchange. Federal law changes would be needed to allow people to bring their exchange subsidies to buy into full benefit Medicaid instead of QHP benefit Medicaid.
These plans run into a political reality. The US medical services industry (hospitals, doctors etc) have a de facto position that they only support coverage expansions when the newly covered population will be paying providers at the same or higher rate than providers were already getting. Medicaid’s cost savings is overwhelmingly due to Medicaid paying doctors and hospitals a lot less than per unit of service compared to both Medicare and private insurance.
** Only downside of this paper is that several colleagues and I were in the process of drafting up a similar project using very similar data. That idea just got massively scooped!
If the same investigation and methods were performed individually within each expansion state (hypothetical), my guess is the results would be as varied as the states themselves. Mcaid rates and access, along with quality, will dictate conclusions. In aggregate the results mean something, but seeing as Mcaid so state-driven, I am reluctant to cite this study as a likely “cost-effective win” for team public payer.
Medicaid is a critical safety net/backstop for old-age convalescent care and ER visits. In my experience, it’s pretty useless for routine medical care because virtually no doctors outside a hospital accept it. Medicaid reimbursements are so low, it’s probably easier for them to provide free care and then write it off as a charitable donation or something. Dave, any thoughts from a policy standpoint on raising Medicaid reimbursement rates for GPs and other basic providers? Is it just “well, pay them more,” (= higher costs/budgets) or are there other issues to consider?
Not really responding to your post, but the year I spent on private ACA coverage in a non-expansion state; I was always refused service until I coughed up some money “to cover the deductible” . Sometimes a lot – like $400. As soon as I went back to employee insurance this stopped. Often when calling an office to set up a visit – when I told them my carrier’s ACA plan, I would get a nasty big fat no response. I am fortunate and not poor, just a bit disturbing to see first hand how less fortunate folks are treated.