As one of the most contentious provisions of the Patient Protection and Affordable Care Act, Medicaid expansion has affected both for-profit and nonprofit hospitals and health systems and served as a point of contention in political campaigns.
Here are 50 things to know about the controversial topic.
Medicaid expansion under the PPACA
1. One of the primary goals of the PPACA is to reduce the number of uninsured Americans. To help meet that goal, the PPACA includes an individual mandate and other provisions to incentivize people to sign up for health coverage, and the health reform law also initially required Medicaid to be expanded in all states to provide a greater percentage of the population access to affordable coverage.
2. Through its Medicaid expansion provisions, the PPACA required states to cover almost all people under age 65, who are not pregnant, not entitled to Medicare benefits and who have incomes at or below 138 percent of the federal poverty level, which is approximately $27,310 for a family of three in 2014.
3. Medicaid is funded by both the federal and state governments. To fund PPACA Medicaid expansion, the health reform law provides the federal government will completely fund most states’ costs of expanding the program in 2014 through 2016.
4. The federal funding will eventually decrease to 90 percent in 2020, according to a Kaiser Family Foundation report.
5. Under the PPACA, states were also required to provide newly eligible Medicaid beneficiaries with “essential health benefits.”
The Constitutional challenge to required Medicaid expansion under the PPACA
6. In June 2012, the U.S. Supreme Court issued a decision that made Medicaid expansion optional.
7. In the lawsuit, Florida and 25 other states filed a constitutional challenge to the PPACA’s Medicaid expansion requirement, according to a Kaiser Family Foundation report.
8. Fourteen states, including California, Connecticut and Delaware, filed “friend of the court” briefs showing their support for the constitutionality of Medicaid expansion. Iowa and Washington were on both sides of the controversy, as the governors and attorney generals in those states took opposite positions on the issue.
9. In the lawsuit, the Supreme Court was tasked with examining the proper division of power between the federal government and the states concerning Congressional spending, according to a Kaiser Family Foundation report.
10. With seven of the nine Supreme Court justices saying the PPACA’s Medicaid expansion was unconstitutionally coercive, the court’s decision made Medicaid expansion optional.
11. Prior to the Supreme Court decision, the Congressional Budge Office estimated Medicaid expansion under the PPACA would lead to 17 million uninsured low-income Americans receiving health coverage by 2022.
12. In July, after the decision was issued, the CBO lowered its estimate to 11 million people.
Effects of the Supreme Court’s Medicaid expansion decision
13. Twenty-three states have not expanded Medicaid, leaving millions of low-income Americans without access to health coverage.
14. Since Medicaid was originally required to be expanded in all states under the PPACA, the health reform law didn’t provide for financial assistance for those who fall below the federal poverty level. Therefore, there are approximately 4 million Americans in non-expansion states that make too much to qualify for Medicaid and make too little to qualify for financial assistance under the PPACA, which is provided to those above the federal poverty level, according to a Kaiser Family Foundation report.
15. The vast majority (86) percent of those who fall into a coverage gap reside in the south, with 11 of the 23 states located in that region choosing to forgo Medicaid expansion, according to the report.
16. Twenty-five percent of the people who fall into the coverage gap reside in Texas, which is the greatest percentage of any state, according to the report.
Which state will expand Medicaid next?
17. In November, Republican governors were re-elected in Florida, Georgia, Wisconsin, Maine and Kansas, which makes Medicaid expansion unlikely in those states.
18. Florida Gov. Rick Scott (R) isn’t completely opposed to expanding Medicaid in his state. However, he hasn’t made an effort to persuade state lawmakers to expand the program. Even if Gov. Scott decided to pursue expansion, he would face a tough battle, as Florida has a Republican-dominated House.
19. If a Democrat had been elected to lead Maine, the state would have likely expanded its Medicaid program. Maine’s Democratic-controlled legislature has attempted to expand Medicaid five times, and Gov. Paul LePage (R), who has been re-elected, vetoed the legislature’s efforts each time.
20. The likelihood of Medicaid expansion isn’t dim in all states with Republican governors. Utah Gov. Gary Herbert (R) hopes to present an expansion plan to the Republican-controlled legislature in his state, and Wyoming Gov. Matt Meed (R) is also interested in widening Medicaid eligibility in his state.
21. In November, North Carolina Gov. Pat McCrory (R) said he was assessing whether he should expand Medicaid in his state, which would provide about 500,000 North Carolinians with health coverage. However, he wants to improve healthcare services for the 1.8 million people in North Carolina already covered by Medicaid before pursuing any expansion plans.
22. Some states are implementing alternative Medicaid expansion plans. In August, HHS approvedPennsylvania’s plan to use federal Medicaid expansion funding to launch Healthy Pennsylvania, a program that will promote affordable care and increase access to care for the uninsured. The Healthy Pennsylvania initiative extends coverage to Pennsylvanians with incomes below 133 percent of the federal poverty level.
23. Indiana Gov. Mike Pence (R) is seeking federal approval of a proposal that involves expanding the Healthy Indiana Plan, a state-sponsored health insurance program administered by private health insurers and available to adults ages 19 to 64 with incomes less than 100 percent of the federal poverty level who are not covered by Medicaid or other essential health coverage.
24. Virginia Gov. Terry McAuliffe (D) proposed a limited Medicaid expansion plan to provide health insurance to approximately 25,000 uninsured people in his state.Medicaid expansion has significant support in Virginia, with 61 percent of Virginia voters supporting Medicaid expansion in September.
Enrollment growth in expansion states
25. The 23 states that have not expanded Medicaid are expected to experience 5.2 percent enrollment growth in the program for fiscal year 2015, which is minimal compared to the 18 percent increase in enrollment projected for expansion states, according to a survey by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.
26. Of the states that have expanded Medicaid, California has the highest number of residents who may qualify for Medicaid, with 2.9 million residents qualifying under the expanded qualification thresholds, according to a Families USA report.
27. New York has the second largest amount of residents who are Medicaid-eligible, with 903,000 residents eligible under the expanded thresholds.
28. A study from the Robert Wood Foundation and the Urban Institute examined 14 large cities across the nation to determine the effects of Medicaid expansion on the number of insured. In the cities located in expansion states, the study found the number of uninsured will decrease by an average of 57 percent by 2016, while the number of uninsured in cities located in non-expansion state will decrease by an average of 30 percent.
29. Colorado and Michigan have both expanded Medicaid, and by 2016 the number of uninsured in Denver is expected to decrease by 49 percent, and the number of uninsured in Detroit is expected to decrease by 66 percent, according to the study.
30. Neither Georgia or North Carolina have expanded Medicaid, and by 2016 the number of uninsured in Atlanta is expected to decrease by 25 percent, and the number of uninsured in Charlotte, N.C., is expected to decrease by 36 percent, according to the study.
Potential enrollment growth in non-expansion states
31. Texas has 2.5 million residents who qualify for Medicaid under the expanded thresholds, the most of any of the non-expansion states, according to a Families USA report.
32. With 1.8 million residents who qualify for Medicaid under the expanded thresholds, Florida has the second largest population of residents who would qualify for Medicaid if the state chose to expand.
Implications of not expanding Medicaid
33. In the 27 states and the District of Columbia, where Medicaid has been expanded, Medicaid spending is expected to increase 18.3 percent overall, with state spending only increasing 4.4 percent, according to a survey by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.
34. The additional federal funds available to expansion states result in a significant difference between total spending and state spending growth, according to the survey.
35. Without the enhanced federal funds, state Medicaid spending is projected to increase 6.8 percent in the 23 non-expansion states, with total and state spending on Medicaid growing at similar rates, according to the survey.
36. Non-expansion states are passing up approximately $423.6 billion in federal Medicaid funds from 2013 to 2022, according to an Urban Institute report.
37. In non-expansion states, hospitals are forced to find creative ways to help absorb some of the shortfalls in providing uncompensated care.
38. Although hospitals in non-expansion states may attempt to make changes to curb costs that don’t have serious effects on patients, in the end, even forgoing facility upgrades or cutting costs on maintenance will have a negative effect on patients, according to a Healthcare Payer News report.
39. As of July, Fitch had downgraded 10 hospitals, and five of them are located in states that have not expanded Medicaid.
40. As of July, Fitch had upgraded nine hospitals, and eight of them are located in expansion states.
41. In October, Fitch Ratings said, “We expect providers in states that have chosen not to participate in expanded Medicaid eligibility to face increasing financial challenges in 2014 and beyond.”
42. In states that chose to expand Medicaid, nonprofit hospitals and health systems were already beginning to realize the benefits of increased insurance coverage in October, according to a Fitch Ratings report.
Cost of expanding Medicaid
43. States expanding Medicaid are expecting to spend more on Medicaid because of increased enrollment due to the “woodwork effect” — when people who were previously eligible but not enrolled sign up because of increased outreach and awareness, according to an analysis from healthcare business advisory company Avalere Health.
44. Non-expansion states are also concerned about the woodwork effect, with 17 states not expanding Medicaid experiencing enrollment growth in the first three months of this year.
45. Of the 23 states that haven’t expanded Medicaid, these 10 would have the lowest 10-year total cost to expand, according to an Urban Institute report:
o Maine — $(570) million*
o Wisconsin — $(248) million*
o Wyoming —$118 million
o Alaska — $147 million
o South Dakota — $157 million
o Montana — $194 million
o Idaho — $246 million
o Nebraska — $250 million
o Utah — $364 million
o Kansas — $525 million
*Maine and Wisconsin are shown with state Medicaid savings, indicated by placing number in parentheses, based on the assumed continuation of pre-PPACA Medicaid eligibility for adults. State costs do not include offsetting savings and revenues.
46. The non-expansion states with the highest 10-year cost of expanding the program include:
o Texas — $5.7 billion
o Florida — $5.4 billion
o North Carolina — $3.1 billion
o Pennsylvania* — $2.8 billion
o Georgia — $2.5 billion
o Tennessee — $1.7 billion
o Missouri — $1.6 billion
o Virginia — $1.3 billion
o Louisiana — $1.2
o South Carolina — $1.2 billion
*Pennsylvania’s plan to use federal Medicaid expansion funding to launch a program that will promote affordable care and increase access to care for the uninsured has since been approved by HHS.
Change in payer mix in expansion states
47. In the first half of this year, five of the major for-profit hospital operators began experiencing a dramatic shift in the percentages of insured patients and self-pay patients visiting their facilities.
48. Comparing same-facility admissions from the first half of 2013 to the first half of 2014, Nashville, Tenn.-based Hospital Corporation of America saw a 32 percent increase in Medicaid patients and a 46 percent decrease in self-pay patients in expansion states. However, across both expansion and non-expansion states, HCA saw only a 6.6 percent decrease in self-pay patients, according to a report from PwC’s Health Research Institute.
49. Dallas-based Tenet Healthcare Corp. saw a 6.5 percent decrease in self-pay patients across all of its facilities between the first half of 2013 and the first half of 2014. However, when only the facilities in expansion states were examined, Tenet saw a 46 percent decrease in self-pay patients and a 20.5 percent increase in Medicaid patients, according to the PwC report.
50. Comparing same-facility admissions from the first half of 2013 to the first half of 2014, Franklin, Tenn.-based Community Health Systems saw 10.4 percent increase in Medicaid patients and a 47.6 percent decrease in self-pay patients at its facilities located in expansion states. However, across all states, CHS only saw a 14.7 percent decrease in self-pay patients, according to the PwC report.