Advocates for Evidence-Based Health Policy Speakers
The Private Option is as Good as Traditional Medicaid
Recently, a group of physicians renewed their call for a single-payer system to replace the current hodgepodge of programs comprising the United States healthcare “system.” While political discourse among the Democratic presidential candidates continues to debate Medicare-for-All, the political realities in Washington D.C will make achieving such a system nothing more than a dream regardless of who wins the White House.
Thus the question arises, what to do in the meantime? If the Affordable Care Act is not immediately repealed and replaced by Donald Trump and the 115th Congress, it will fall on Bernie Sanders or Hillary Clinton to build on the ACA. One of the largest building blocks, accounting for approximately 14 million new people with health insurance, is the Medicaid program.
Source: Kaiser Family FoundationMedicaid, however, still leaves out 3 million people who live in states that refuse to expand the program. In effect, these folks are too poor to take advantage of federal subsidies in the ACA Marketplaces yet too “rich” to receive Medicaid under existing state rules. Eighty-nine percent of these people live in the South – in states such as Texas, Florida, Georgia, and North Carolina. Two of the states in the South that have expanded Medicaid are the subject of an article published a few months ago in Health Affairs.
Kentucky embraced the Medicaid expansion as a traditional publicly-funded program whereas Arkansas opted to expand Medicaid using a “private option” which pushed recipients into the ACA Marketplaces.
Results comparing Kentucky and Arkansas to a nearby non-expansion state (Texas) demonstrated tremendous gains in insurance coverage in the two states that expanded. The uninsured rate among low-income non elderly adults went down from 40.3% to 12.4% in Kentucky and from 41.8% to 19.4% in Arkansas but only from 38.5% to 27.1% in Texas. Despite the rejection of Medicaid expansion in Texas, the woodwork effect and ACA Marketplace subsidies still resulted in some insurance coverage gains.
Medicaid expansion in Kentucky and Arkansas led to improvements in access to care – fewer patients skipped medications due to cost, fewer people had trouble paying medical bills, and more patients received care for a chronic condition. It is critical to note that Kentuckians had much less trouble paying medical bills, even when compared to Arkansans.
Traditional Medicaid expansion is slightly better from a financial standpoint, but obtaining medications and medical care is still improved by the “private option.” If a Democrat wins the White House, he or she should allow Republicans to expand Medicaid, even through the private option, because expanding Medicaid is more important than fighting over how to expand it.
commentary by Cedric Dark
Abstract
Under the Affordable Care Act, thirty states and the District of Columbia have expanded eligibility for Medicaid, with several states using Medicaid funds to purchase private insurance (the “private option”). Despite vigorous debate over the use of private insurance versus traditional Medicaid to provide coverage to low-income adults, there is little evidence on the relative merits of the two approaches. We compared the first-year impacts of traditional Medicaid expansion in Kentucky, the private option in Arkansas, and nonexpansion in Texas by conducting a telephone survey of two distinct waves of low-income adults (5,665 altogether) in those three states in November–December 2013 and twelve months later. Using a difference-in-differences analysis, we found that the uninsurance rate declined by 14 percentage points in the two expansion states, compared to the nonexpansion state. In the expansion states, again compared to the nonexpansion state, skipping medications because of cost and trouble paying medical bills declined significantly, and the share of individuals with chronic conditions who obtained regular care increased. Other than coverage type and trouble paying medical bills (which decreased more in Kentucky than in Arkansas), there were no significant differences between Kentucky’s traditional Medicaid expansion and Arkansas’s private option, which suggests that both approaches improved access among low-income adults. PMID: 26733706