Medicaid Expansions

In the short time since states have been able to expand Medicaid to low-income adults under health reform, a clear divide has emerged between states that have expanded Medicaid and those that have not. Since the major coverage provisions of the ACA took effect in 2014, insurance coverage rates have improved across the country, but the gains are far greater in the states that have expanded Medicaid. As a result, hospitals in expansion states are treating fewer uninsured patients, and the amount of uncompensated care they are providing is declining steeply. Moreover, contrary to critics' claims that Medicaid expansion is financially unsustainable for states, there is increasing evidence that expansion has saved states money, and these savings are expected to grow over time.

The ACA gives states the option of providing less-generous Medicaid coverage to adults who become eligible through the law’s expansion of the program. Based on a review of the benefit design choices made by states that had expanded Medicaid by the end of 2014, this brief finds that states have chosen to offer more generous coverage than what is required under federal law, either narrowing or eliminating the distinction between coverage levels for newly eligible adults and those for traditional adult beneficiaries, such as pregnant women, parents and guardians, or beneficiaries with disabilities. This suggests that states view the newly eligible beneficiaries as having the elevated health and health care needs that are common among low-income populations.

Ever since the Supreme Court ruled in June 2012 that states could effectively choose whether or not to accept the ACA’s expansion of Medicaid eligibility, that choice has been one of the most prominent and often one of the most contentious issues for states. This report provides state-level estimates of Medicaid enrollment and the number of uninsured in 2016 for the 21 states that have not expanded eligibility. It also provides estimates of Medicaid and uncompensated care spending for the period 2015 to 2024.

Opponents of Medicaid expansion claim that states need flexibility to promote personal responsibility, ensure appropriate use of health care services, and require work. These critics seek to impose premiums, cost-sharing charges, and work requirements that go well beyond what the Medicaid statute allows. States can, however, use Medicaid to employ a number of strategies to promote personal responsibility and work and ensure appropriate use of health care, which would also help lower Medicaid spending and improve beneficiary health outcomes. These alternatives focus on improving the delivery of care instead of imposing harsh requirements that prevent people from getting care in the first place. Many states have already taken advantage of Medicaid’s existing flexibility to move in this direction.

In the states that have chosen not to expand their Medicaid program, there are hundreds of thousands of uninsured, low-income Hispanics who are lagging behind on key measures of access to health care. Whether individuals are insured or uninsured greatly affects their ability to obtain regular health care. And in communities of color, where rates of uninsurance and poor health outcomes are higher than in white communities, the differences between those who have insurance and those who lack it are stark. This series of state-by-state reports illustrates the positive effects (in terms of access to care and certain preventive services) of having insurance for low-income Hispanics in states that have not expanded Medicaid.