Medicaid Expansions

Behavioral health parity refers to requirements for health insurers to cover mental health and substance use disorder services on terms that are equal to those offered for medical and surgical services.  This issue brief explains how behavioral health parity applies in the Medicaid program, including the major provisions of the Centers for Medicare and Medicaid Services’ April 10, 2015 proposed regulations, and identifies key policy issues at the intersection of behavioral health parity and Medicaid.

Ever since the Supreme Court effectively ruled in June 2012 that states could choose whether or not to expand Medicaid to nonelderly adults under the ACA, that choice has been one of the most prominent and often one of the most contentious issues for states. This report describes the six states (Arkansas, New Hampshire, Indiana, Iowa, Michigan and Pennsylvania) that requested and received approval from the federal government to experiment with coverage approaches that are modelled on private insurance concepts and not permitted in a standard Medicaid expansion.

Since implementation of the ACA, the 30 states that have expanded Medicaid have enrolled more than 10 million people in Medicaid or the Children’s Health Insurance Program and the collective rate of uninsured individuals in these states has fallen from 18 percent to less than 11 percent. This paper examines early data on expansion-related decreases in uncompensated care costs and related state budget implications, including impending reductions in federal support for Medicaid Disproportionate Share (DSH) payments and waiver pools made available to support hospital uncompensated care costs prior to the Medicaid expansion authorized and funded under the ACA.

This proposed rule would extend enhanced funding for Medicaid eligibility systems as part of a state’s mechanized claims processing system, and would update conditions and standards for such systems, including adding to and updating current Medicaid Management Information Systems (MMIS) conditions and standards. These changes would allow states to improve customer service and support the dynamic nature of Medicaid eligibility, enrollment, and delivery systems. Comments on this proposed rule are due by June 15, 2015.

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.

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.

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.

This proposed rule would extend enhanced funding for Medicaid eligibility systems as part of a state’s mechanized claims processing system, and would update conditions and standards for such systems, including adding to and updating current Medicaid Management Information Systems (MMIS) conditions and standards. These changes would allow states to improve customer service and support the dynamic nature of Medicaid eligibility, enrollment, and delivery systems.

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 this brief, researchers from the Maine Rural Health Research Center present findings from a SHARE-funded evaluation of the rural implications of Medicaid expansion under the ACA. The authors examine the following issues: the extent to which prior public health insurance expansions have covered rural populations; whether rural residents who are expected to be newly eligible for Medicaid in 2014 differ from their urban counterparts; the extent to which rural individuals might differentially benefit from the ACA Medicaid expansion in light of the expansion becoming optional; and whether rural enrollees are likely to have adequate access to primary care.