Millions uninsured on patchwork Medicaid expansion map

Washington As most states wrapped up their 2013 legislative sessions, many of them closed the door on their most likely opportunities to expand Medicaid under an optional provision of the Affordable Care Act. When time expired on those sessions, more than half the states were on track to reject the expansion, at least for its first year.

Still, it's possible that a few states may decide to revisit the issue before the scheduled start of Medicaid expansion in 2014. “I don't think this map is settled” on state actions to expand Medicaid, said Caroline Pearson, a vice president at Washington consultant Avalere Health LLC. “In theory, you could see some states take this up again in the fall.”

The Affordable Care Act promises an enhanced federal match rate to cover additional coverage costs for any state that expands eligibility for its Medicaid program up to an effective rate of 138% of the poverty level. For the first three years of expansion, the federal government would cover all costs of caring for the newly eligible, with states eventually taking on up to 10% of expansion costs.

But many states aren't taking the deal. According to the most recent projections by Avalere Health at this article's deadline, 26 states won't expand their Medicaid programs in 2014. These are the 19 states that have rejected expansion an additional seven that are leaning against it.

If this projection holds true in 2014, it means that 5.3 million fewer low-income people will gain access to this public insurance option. “Of those, 3.4 million will remain uninsured; the rest will qualify for exchange subsidies,” Avalere's analysis stated. The subsidies refer to funds available to individuals earning between 100% and 400% of poverty who would be eligible to apply for federal premium tax credits to buy coverage from state insurance marketplaces — although the subsidies are no guarantee that all of them will take up coverage.

Twenty-two states and the District of Columbia are expanding Medicaid, and an additional two are leaning toward expansion. As a result, Avalere expects that Medicaid enrollment will increase by 5.5 million people in the first year.

The projections reveal just how divided the nation is on this ACA provision, as well as how diverse physician opinions on the issue have been. In Kentucky, which recently joined the pool of expansion states, the governor predicted significant financial benefits for the state. At least 300,000 more constituents will obtain coverage, announced Gov. Steve Beshear, a Democrat, in early May. Expansion also will “dramatically improve the state's health, create nearly 17,000 new jobs and have a $15.6 billion positive economic impact on the state” between fiscal 2014 and 2021, when the expansion is fully implemented, according to a statement from Beshear's office.

Although Kentucky GOP lawmakers oppose the plan, Kerri Richardson, the governor's communications director, said Beshear might try to revise Medicaid eligibility rules on his own. “Legislative committees review new or amended regulations, and may accept or reject them under certain circumstances. However, the governor may then choose to implement those regulations” over objections by those committees, she said.

Mississippi, on the other hand, remains one of the firm holdouts among the nonexpansion states. Instead of seeing it as a cost-saver, Republican Gov. Phil Bryant maintains that any expansion of Medicaid “would result in tax increases for Mississippians or cuts to critical spending in areas like education, public safety and economic development,” said Mick Bullock, the governor's communications director and press secretary.

Many Mississippi physicians don't appear that eager to expand Medicaid, either. All uninsured patients deserve medical coverage, but doctors have persistent concerns that expansion would perpetuate an already broken program, said Steve Demetropoulos, MD, president of the Mississippi State Medical Assn. “Physicians fear that an expansion of Medicaid may not be financially sustainable and will impose on the state unintended consequences that will weaken provider capacity, which is inadequate now,” Dr. Demetropoulos said.

Avalere notes many states rejecting expansion have Republican-controlled executive and legislative branches. However, some states with GOP governors who had opposed the ACA, such as Arizona's Jan Brewer and Nevada's Brian Sandoval, decided that expanding Medicaid was more cost effective than rejecting it.

States still have time to switch

Some states rejecting expansion may have a change of heart later in 2013, either through special legislative sessions, ballot initiatives or waiver negotiations with the federal government, Avalere's Pearson said. The Obama administration has not set a hard deadline for an expansion decision, and it also has noted that states can opt into the provision at any time.

In Florida, Democratic lawmakers have been pressuring GOP Gov. Rick Scott to call a special session to revisit Medicaid expansion after state House and Senate lawmakers failed to agree on the issue. This outcome leaves “more than 1 million uninsured Floridians in the lurch,” while threatening the state's businesses with $150 million in fines under the ACA employer coverage mandate, the state Senate's Democratic Caucus wrote in a May 6 letter to Scott.

After initial resistance, Scott had come out in support of a temporary three-year Medicaid expansion. “But my understanding is he was not at all present and did not use any political capital to push the Legislature to support it” during the state's legislative session, Pearson said. “So I am relatively skeptical that the Democrats will get a lot of traction.” The caucus had not yet heard back from the governor on its request for a special session by this article's deadline.

The Florida Medical Assn. saw elements in both the House and Senate bills that were consistent with its principles, but it has not taken a position either for or against expansion, said Erin VanSickle, the association's vice president of communications and marketing.

Some states are pursuing alternatives to traditional expansion, such as Arkansas, which recently enacted a plan to expand Medicaid using a premium assistance model. Under this plan, Medicaid would pay to enroll new eligibles in private exchange plans that follow Medicaid cost-sharing and benefits rules, Pearson said. The Centers for Medicare & Medicaid Services has indicated that it would be willing to work with Arkansas and other interested states to authorize this type of model, most likely through the Medicaid waiver process, she said.

Health care professionals in Arkansas welcomed this coverage expansion approach, said William Golden, MD, medical director of the Arkansas Medicaid program. “It will be a boost to many communities in our rural state.”

Expansion may worsen doctor shortage

Pearson said alternatives to Medicaid expansion such as the model envisioned in Arkansas might help stave off potential shortages of primary care doctors.

Some states that expand traditional Medicaid are going to see an enrollment surge that strains the network of doctors who do take Medicaid, she said, especially in states that see major program growth in the initial years. A recent analysis from HealthPocket Inc., a website that ranks and compares health plans, said health professionals reported low acceptance rates of Medicaid patients. Expansion might give more individuals insurance cards, but that might not translate into seeing a physician.

“If the current Medicaid acceptance rates hold true for 2014, timely access to care for those relying on Medicaid is likely to become more difficult as enrollees increase for an already inadequate pool of doctors,” said Kev Coleman, HealthPocket's head of research and data.

Some states might rely more on Medicaid managed care plans, which tend to build somewhat better networks than those that exist in fee-for-service. Putting enrollees into private exchange plans that pay commercial pay rates also could encourage broader participation of health professionals, Pearson said.

Some have questioned how cost-effective the Arkansas approach would be. A March Kaiser Commission on Medicaid and the Uninsured report examined the Medicaid premium assistance model and noted that purchasing coverage through an exchange was expected to cost more than obtaining coverage through Medicaid.