Is Expanded Medicaid Coverage Even Worth It?

In the Affordable Care Act’s five-plus years of existence, no aspect of the law has been safe from Republican criticism.

The GOP has lobbed disparagements at the ACA that have ranged from truthful (questions about whether it will slow spending) to not-so-truthful (“death panels“), and varying levels in between.

In recent weeks, Republicans’ criticism has shifted to claiming that the ACA is causing individuals to enroll in low-quality coverage.

For example, in an interview with NBC’s “Meet the Press,” House Speaker John Boehner (R-Ohio) said being enrolled in Medicaid is “almost like” having no insurance “because you can’t find a doctor that will see Medicaid patients.” He added, “And so where do they end up? The same place they used to end up, in the emergency room.”

That is a serious accusation, insinuating that the 9.6 million U.S. residents who were newly enrolled in Medicaid over the ACA’s first two open enrollment periods (according to a RAND Corporation study released earlier this month) are getting low- or no-quality coverage.

So, are nearly 10 million people getting inferior coverage? Are Medicaid beneficiaries worse off than those with private insurance? Do Medicaid beneficiaries go to the ED more?

Comparing Benefits

Comparing coverage between Medicaid and private coverage — whether it was purchased through an ACA exchange, the individual market or through an employer — is difficult, because Medicaid benefits largely are determined by each individual state. While CMS does list a number of mandatory benefits that Medicaid must cover in each state, the list of optional benefits is far longer. 

And while exchange plans feature 10 essential health benefits they must cover, what each plan covers is based on benchmark plans within each state and varies. Finally, employer-based coverage varies so widely it’s not possible to compare.

Considering the Claims

Even if it’s nearly impossible to compare Medicaid to other types of coverage, we can at least evaluate Boehner’s comments.

    [Y]ou can’t find a doctor that will see Medicaid patients

While the absolute nature of Boehner’s statement make it inaccurate, the sentiment, at least, is true. It is difficult for Medicaid beneficiaries to find a doctor who will accept their coverage. That’s not just ACA critics speaking; an HHS Office of Inspector General report from December found “slightly more than half of providers could not offer appointments to enrollees” in Medicaid managed care plans (which covered nearly three-quarters of all Medicaid beneficiaries in 2011, according to the Kaiser Family Foundation).

Further, the report found that state requirements for access to care differ significantly and infrequently are enforced. As a result, the report noted that beneficiaries often must wait months or travel long distances to see a provider.

Meanwhile, a study conducted last year found that even if doctors claim they accept Medicaid beneficiaries, many don’t actually provide them with care. The study, conducted in Seattle, found that about half the time a provider was listed on a Medicaid managed care program’s website as accepting new patients, “mystery shoppers” who called the providers and asked to schedule an appointment were told they were not accepting new patients.

The ACA attempted to make it easier for beneficiaries to access providers by bumping up physician reimbursements to the same rates as Medicare reimbursements. According to a study published in January in the New England Journal of Medicine, those increases resulted in easier access to appointments. However, federal funding for the pay bump expired on Dec. 31, 2014. Although 15 states have elected to continue the pay bump with their own funding, the expiration does not portend well for access to care.

Those payments might be the biggest factor in beneficiaries’ access. Kaveh Safavi, a director at Accenture Health, told Kaiser Health News that although there a “a lot of dynamics at play” in whether doctors accept Medicaid beneficiaries, “historically, things have not changed [doctors’ participation] as much as when states make payment changes.”

    [W]here do they end up? … [I]n the emergency room.

There is evidence, albeit from 2008, to support this assertion. An analysis published in January 2014 found that low-income residents in Oregon who obtained Medicaid coverage in 2008 under a pilot program similar to the ACA’s expansion visited EDs 40% more often over an 18-month period than other state residents. Amy Finkelstein, an MIT professor and an author of the study, told NPR that many of the visits were for “conditions that may be most readily treatable in primary care settings.”

Upon release of the study, Republicans jumped at the chance to question Medicaid’s ability to provide quality care, especially in the context of increasing enrollment because of the ACA’s expansion.

However, CMS spokesperson Emma Sandoe defended the program at the time, saying, “It is reasonable to expect that people who in the old system couldn’t get insurance would have some immediate emergency needs, and moreover that they wouldn’t have a regular health [professional] on the front end of coverage.”

Subsequent research from UCLA’s Center for Health Policy Research supported Sandoe’s assertion. The study found that new enrollees in California’s Low Income Health Program, which covered state residents with incomes of up to 200% of federal poverty level until Dec. 31, 2013,  did indeed use the ED more often — at least initially. It found that between 2011 and 2013 enrollees’ ED use declined by 70%. Meanwhile, such enrollees’ hospital admissions declined by 79%. By the end of the study, LIHP enrollees used the hospital at about the same rate as people who already had been insured.

It’s Not Just About Beneficiaries

When considering the quality of Medicaid coverage, it’s easy to focus solely on the individuals who receive that coverage, but that’s not the only factor to consider.

Hospitals’ finances also are a major beneficiary of Medicaid expansion.

Take, for instance, Cleveland Clinic President and CEO Delos Cosgrove’s unabashed support for Ohio’s Medicaid expansion in a letter to the editor of the Columbus Dispatch. He wrote, “[W]hile Medicaid pays on average about two-thirds of the cost of providing that care, it is far better than seeing patients in the emergency room and relying on charity care,” adding that expanding Medicaid is the “fiscally responsible thing to do.”

Meanwhile, in Florida, where Gov. Rick Scott (R) is in a kerfuffle with federal officials over whether HHS will renew billions of dollars in federal funding for an uncompensated care program, hospitals are urging Scott to give up the fight and accept Medicaid expansion. In a letter from the Florida Hospital Association, 24 hospital executives reiterated their support for a plan bandied about in the state Senate that would enact an alternative Medicaid expansion. 

Something’s Better Than Nothing

Boehner’s assertions are at least somewhat informed by data. Medicaid might not be ideal coverage.

However, it’s still coverage. For the millions of people who have gained Medicaid coverage through the ACA, it’s fairly certain that they would prefer having something over nothing. While the Oregon study also found that Medicaid beneficiaries did not see significant improvements in their hypertension, cholesterol, diabetes or other overall health measures, they were less likely to go bankrupt because of health care expenditures, reported less depression and overall had better health-related quality of life.

Further, while hospitals are not enamored with Medicaid payment rates, the alternative is that hospitals would have to care for patients who could not afford to pay. For hospitals’ bottom lines, smaller Medicaid reimbursements is far preferable to receiving nothing at all.

Around the nation

Here’s a look at other stories making news on the road to reform.

Danger for Safety (Net). Many safety-net hospitals have benefited from the ACA because it has reduced the number of uninsured (and potentially non-paying) patients they treat. However, U.S. News & World Report notes that such facilities are concerned about a number of financial difficulties they might face because of the law, such as a reduction in Disproportionate Share Hospital Program payments.

Complex Law Makes Things Easier. Economist Dean Baker looks at how the ACA makes it easier for young, working parents, including by allowing some to work part-time while caring for their children and still be able to afford health coverage.

The Counting Machine Continues. Stakeholders have followed ACA enrollment figures closely, using the data to both prop up and condemn the law. Those observers will have even more numbers to bandy about, as HHS on Tuesday announced that nearly 150,000 U.S. residents signed up for coverage during the special enrollment period around Tax Day.

Pride in Prejudice (Against the ACA). House Speaker John Boehner on Tuesday told a Republican conference meeting that is “proud” that the GOP will be “standing up for the Constitution” when House v. Burwell is heard next week in federal district court in Washington, D.C. The case challenges President Obama’s use of executive orders to make changes to the ACA.

Related Topics

Medi-Cal Road to Reform The Health Law