Three Questions about Medicaid As the ACA Turns 10

3.12.2020
Commentary
Physician sits with two patients filling out paperwork

The Affordable Care Act (ACA), which turns 10 on March 23, dramatically changed Medicaid, making it available to millions of previously ineligible low-income adults – primarily childless adults who were not eligible in most states no matter how low their incomes were, as well as parents of dependent children in states with restrictive eligibility criteria. As some states continue to debate whether to expand Medicaid and policymakers propose more far-reaching changes to the program, it is critical to provide timely evidence on how the program is working and what the potential effect of major changes would be. 

Medicaid was the primary workhorse of the ACA’s coverage gains, through Medicaid expansion in 37 states and the “welcome-mat” effect, in which previously eligible but unenrolled people signed up for Medicaid because of greater outreach and a streamlined application. But 14 states have not expanded Medicaid under the ACA, and debate continues in those states about the potential value of expansion.

In addition, many states plan to add work requirements to Medicaid, which represents a major shift for the program. Most recently, the Centers for Medicare & Medicaid Services (CMS) published guidance inviting states to apply for a “Healthy Adult Opportunity” waiver, which would cap federal financial support for Medicaid in exchange for unprecedented flexibility to modify who Medicaid covers and what that coverage looks like (an approach often called “block grants”).

With many potential changes to the program being considered, our team has been working over the past year to provide evidence to answer three important questions about Medicaid.

How Does Medicaid Affect Health?

In a 2019 article, we summarized some of the most recent and compelling studies on the health impacts of Medicaid expansion. Examining outcomes such as self-reported health, blood pressure, end-stage renal disease, surgical conditions, and overall mortality, our review highlighted the multifaceted ways that Medicaid expansion has improved health. Other reviews have documented similar findings, though it is important to note that older studies from the first year or two after expansion may already be out of date, because multiple papers indicate some health outcomes of expanded coverage take several years to become evident.

How Does Medicaid Compare with Private Insurance?

Multiple states are considering private Marketplace insurance instead of Medicaid for their low-income populations, and because some argue that Medicaid does not serve its beneficiaries well (despite the growing evidence cited above). In this context, it is extremely important to understand how different types of insurance compare. Prior research has analyzed this question but typically in an extremely flawed manner, by simply comparing lower-income individuals who have Medicaid to higher-income adults with employer coverage. This apples-to-oranges comparison reveals more about the profound effects of socioeconomic status on health than anything about the effects of insurance.

In ongoing work using an all-payer claims database and detailed income information from Medicaid and a state Marketplace, we are examining how these two coverage types differ in terms of access to care, costs, and quality for adults with similar incomes and health status differ between these two coverage types. This research will offer rigorous evidence to help policymakers consider trade-offs between public and private insurance.    

What Are the Effects of Work Requirements in Medicaid?

Twenty states have applied for or received approval for Medicaid work requirements.  So far, only Arkansas fully implemented the policy, which a federal judge halted in 2019, a decision recently upheld by an appeals court. Supporters of these requirements say they will increase employment among low-income adults, reduce poverty, and shift beneficiaries from Medicaid into private coverage. 

Our team published the first independent analysis of Medicaid work requirements, based on a survey of roughly 6,000 low-income adults in Arkansas and several comparison states. We found a significant reduction in Medicaid coverage and a concurrent rise in uninsurance, with no meaningful change in either employment or private coverage. We also found that many in Arkansas were confused about the policy: one in three adults targeted by the rule had not even heard of the requirements, even though more than 95 percent of them were already working enough hours or should have qualified for an exemption. These findings align with what other researchers encountered in Arkansas and New Hampshire, which recently halted its work requirement.

We are currently conducting a follow-up survey tracking the second-year effects of Arkansas’s policy. These results should inform future efforts in other states considering community engagement waivers, as we discuss in a recent essay exploring South Carolina’s new Medicaid work requirement for low-income parents, the first to be approved by CMS in a traditional nonexpansion state.

Future Directions

Ten years after passage of the ACA and one year after launching our Policies for Action Medicaid research hub, we remain committed to the notion that objective evidence should guide the future of Medicaid and, more generally, policies affecting health care access. In the upcoming year, we will continue to work on the topics above, as well as on a project looking at the administration’s new “public charge” rule, which uses participation in safety net programs, such as Medicaid, to determine whether legal immigrants can obtain permanent residency status. 

We look forward to the opportunity to contribute to these debates.

 

Photo by Vitali Michkou/Shutterstock

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