Medicaid Expansions

The ACA has contributed to a significant transformation of Medicaid, broadening it as the base of coverage for the low-income population and accelerating state efforts to move from antiquated, paper-driven enrollment processes to a new modernized enrollment experience for individuals. January 1, 2015 marked the first anniversary of key ACA Medicaid provisions, including the Medicaid expansion to low-income adults and new rules for streamlined enrollment and renewal processes that coordinate across insurance affordability programs. This 13th annual 50-state survey of Medicaid and CHIP eligibility, enrollment, renewal, and cost-sharing policies as of January 2015 provides a snapshot of state Medicaid and CHIP policies in place one year into the post-ACA era.

In the twenty-three states that have decided against expanding Medicaid under the Affordable Care Act, uninsured adults who would have been eligible for Medicaid and have incomes at or above the federal poverty guidelines are generally eligible for Marketplace premium tax credits and plans with generous benefits. This study compared estimated out-of-pocket spending for care and premiums, as well as the financial burdens they impose, for the families of these adults under two simulation scenarios: obtaining coverage through a silver plan with subsidized cost sharing and enrolling in expanded Medicaid. Compared with Marketplace coverage, Medicaid would more than halve average annual out-of-pocket spending ($938 versus $1,948), while dramatically reducing the percentage of adults in families with out-of-pocket expenses exceeding 10 percent or 20 percent of income.

Following the Supreme Court’s ruling that states could decide for themselves whether to expand eligibility for Medicaid under the Affordable Care Act, a number of states have opted to do so using alternative approaches. Under federal waiver, these states have focused on expanding the use of private health insurance, requiring beneficiaries to pay premiums, and incentivizing them to choose cost-effective care. This new brief examines the variety of Medicaid reforms that Arkansas, Michigan, Iowa, and Pennsylvania are currently testing. By linking broader program reforms to the adult coverage expansion, these states can align Medicaid with local political conditions while extending insurance to more than 1 million adults who would otherwise lack a pathway to coverage.

This report examines the rollout of the ACA in Michigan, particularly focusing on the state’s passage of Medicaid expansion. The report outlines three key components that contributed to its successful efforts to pass Medicaid expansion – the governor's interest in pursuing the expansion, the support of a strong and vocal multi-sector coalition, and the inclusion of two federal waiver requirements – which could serve as model for other states with bipartisan or Republican-led governments seeking Medicaid expansion.

In some states, policymakers and stakeholders are considering adoption of the Basic Health Program (BHP) option permitted under the ACA. Through BHP, consumers with incomes at or below 200 percent of the federal poverty level (FPL) who would otherwise qualify for subsidized qualified health plans offered in health insurance marketplaces instead are offered state-contracting standard health plans that provide coverage no less generous and affordable than what have been provided in the marketplace. This paper reviews the federal BHP payment methodology; explains how state officials can use information about the characteristics of BHP-eligible consumers to estimate average federal payment amounts; and places the federal payment estimates in context, showing what they can and cannot contribute to a state’s analysis of BHP’s overall fiscal effects.